LuLaRoe or LuLaNo: Will Your Investment Pay Off?

If you’re reading this article, you’re either an avid BOTTLESOUP reader or you’re curious about becoming a LuLaRoe Fashion Consultant. Either way, you’ll enjoy this in-depth look at the LuLaRoe business model. By the end of this post, you’ll have a clear understanding of the company. Allow me to preface this by saying I am not a LuLaRoe Fashion Consultant and, thus, I have no skin in the game. This article is meant to be objective and informative.

Let’s begin.

What Kind of Business is This?

LuLaRoe is a direct sales company that recruits informal retailers, branded as Fashion Consultants. Translation: LuLaRoe does not hire Fashion Consultants. You are not a LuLaRoe employee if you sell LuLaRoe. You do not get any LuLaRoe health benefits, retirement, etc.

Essentially, the relationship you have with LuLaRoe is that of a retailer and wholesaler/manufacturer. LuLaRoe produces the product and sells it to LuLaRoe Fashion Consultants at wholesale cost – essentially like Target, Walmart or any other big retailer, it is your responsibility to sell the product in order to recoup the wholesale costs and potentially earn money on markups.

Sounds simple, right? You know lots of women who like LuLaRoe’s products. In fact, there’s thousands of women on the LuLaRoe BST (Buy/Sell/Trade) groups! There must be money for the making!

Not so fast, tiger.

How Much Money Do I Need to Get Started with LuLaRoe?

LuLaRoe requires a substantial monetary investment for sales. Unlike other direct sales companies like Jamberry and KEEP Collective, LuLaRoe requires you purchase pieces at wholesale and in advance of sales. There’s no catalog. There’s no online shop. You can create a “pop up” shop through a Facebook group or in person, but, essentially, the burden of creating incentive, collecting payment, and recuperating your operating costs are all on you. So how much money does it cost to begin?

Let me be quite clear: LuLa Girls on FIRE is a website dedicated to recruiting new LuLaRoe Fashion Consultants and occasionally selling some product. Don’t believe me? Hop on over to the website and tell me which is easier: buying a pair of LuLaRoe leggings or getting tons of info geared to becoming a consultant? Yeah. You can’t even buy any LuLaRoe products from this LuLaRoe Fashion Consultant on her website.

How Long Will it Take Me to Earn Back my Investment?

According to LuLa in Love, the retail value of a $5,500 start up purchase is $12,500. This assumes that each piece will net an average profit of $18 (and you have approximately 381 items to sell). LuLa in Love provides the following graph:

Perhaps you’re wondering what’s wrong with this graph and its math. I’ll explain:

Let’s say you want to pay off your LuLaRoe investment in 1 month. According to the chart, you need to sell an average of 70 items per week, or an average of 10 pieces per day. If you meet this sales goal, 70 * 4 weeks in a month = 280 pieces sold. Your kit contained 381 pieces. You’ll have 101 pieces left to sell, and you’ll still be in the hole -$460 for the first month. IF you’re scratching your head, let’s back up: you invested $5,500 in your starter kit/inventory. You earned $5,040 from selling 280 pieces of LuLaRoe clothing. $5,500 – $5,040 = $460 shy of your initial investment.

But that’s ok because you still have 101 pieces of inventory left to sell, right?

Sure. If you sell 101 more items at an average of $18 profit per item, you will earn $1,818. Oh, wait, you need to subtract that -$460.

$1,818 – $460 = $1,358.

You will have broken even, but you’ll be out of inventory.

Also, wasn’t that inventory supposed to be worth $12,500 retail?

Yes, the retail price will add up to $12,500 in revenue. But you will not earn $7,000 profit from your $5,500 investment. (Profit = Revenue – expenses) It’s easy to get confused. Don’t feel stupid. I’ll break it down:

$12,500 – $5,500 = $7,000. So how does a $5,500 investment only earn you $1,358 instead of $7,000?

The answer is pretty frustrating. In order for their math to make sense, they must use the highest retail prices to estimate the worth of your inventory. However, it assumes you will price your retail in the mid-level instead of the high level cost. Reality is, with so many LuLaRoe Fashion Consultants many consultants end up having to price items competitively. And in business, competitive means cheap. The lowest possible cost. Why? Well, you need to make sales. If you don’t make sales, then you will lose your investment. For the record, for the $12,500 “value” to be accurate, each piece would need to have an average retail face value of $32.80 ($12,500/381 pieces). The LuLaRoe butter leggings everyone loves? They sell for 2/$40. This makes their retail face value $20 each.

Would you rather make $18 profit on a couple sales and be short a few thousand dollars or lower your prices to make just $2 a sale but “repay yourself” quickly?

For fun, let’s say you engage in competitive pricing. Your LuLaRoe pop up is cheaper than all the rest of the ladies. You sell 381 pieces at a $1 markup and earn just $381, BUT you’ve paid off your investment. Right? Probably not. You’re assuming there’s no shipping and handling fees on your part, which, there will be unless you exclusively sell local. So, add postage and packaging to your costs. If your average shipping and packaging cost is $1.50 an item, you’re actually in the hole -$190.50.

I haven’t taken into account those who have absolutely lost hope and are unloading their LuLaRoe products as cheaply as possible just to get a fraction of their investment back.

But let’s be generous and say you unload all your stuff for an average $18 profit per piece. Let’s say you earn that $1,358 and business is booming. What then? You will need to purchase more inventory. So, let’s say, for simplicity, you decide to purchase $5,000 more in wholesale LuLaRoe clothing. To “repay yourself” this time, you’ll need to earn:

$5,000 – $1,358 = $3,642

You’ll need to earn $3,642 to repay yourself. Or sell approximately 203 pieces to break even this time. After 203 pieces, the remaining 178 pieces are profit. Sell them for an average of $18 profit per piece, and you’ll earn $3,204. But, again, you’ll need to get more inventory to continue.

So, do it again. Another $5,000. This time:

$5,000 – $3,204 = $1,796

Hmm. Ok. So this time, you sell 100 pieces at an average $18 profit per item, and you earn $5,058. Yes, for the first time you actually profit while replenishing inventory. Rate of return? 1.16%.

Bottom line:

Essentially, you must invest over $15,000 and sell everything at an average profit of $18/item to start seeing true returns and true profit on your inventory.

LuLaRoe Fashion Consultants and recruiters will tell you “it takes money to make money” and “every business owner invests in their company” and these things, in many cases, are true. However, the differences between a LuLaRoe Fashion Consultant and a business owner are vast. First, LuLaRoe sets the terms and restrictions. Second, you don’t own or control anything; you and your “business” are dictated by the home office. Third, successful business owners enter into entrepreneurship by creating a business plan and working the numbers (like I walked you through).

Being a successful LuLaRoe Fashion Consultant takes a lot more than $5,000 and a few LuLaRoe pop up shops. It takes sophisticated marketing, business savvy, and significant investment to become a retailer. (I’m not the only blogger who feels this way!) And, please don’t mince my words: I said a retailer. I am not suggesting that marketing, business knowledge, and seed money are the keys to success for LuLaRoe. In fact, my opinion is that LuLaRoe is a risk not worth taking. The returns are very low. The investment is very high. And the market is futile. LuLaRoe is not an innovative necessity; it is a company that produces clothing in poor countries, very cheaply, then profits from wholesaling it to you. Make no mistake: you are LuLaRoe’s customer; they don’t care if you make sales or not.

Just because you’re asked to invest a significant amount of money does not mean the return on investment will be equally significant. Retailers operate successfully by diversifying the products they sell, whereas as a “fashion consultant” for one brand leaves little margin for error. If the product is a flop among your audience, then you have nothing left to offer.

Mrs. Bottlesoup, I just love your analysis of these direct sales companies. I wish you had the time/energy to cover every single one (can you do Zija next?). My biggest take-way from your analysis of these companies is your brilliant observation that direct marketing sales reps are not business owners at all, but rather they are customers! Considering that most of these companies have sales minimums to remain “active”, these sales reps quickly become repeat customers. If these folks only knew that the sales to the bottom 99.5% provide the profit to the top 0.5%. No sales to the public necessary. Therefore, churn in the sales force is a key component to success at the top…the faster the churn, the more inventory purchased by the down-line sales force. Each new LuLaRoe recruit brings in ~$5K for the company. Sales to the general public is completely unnecessary for up-line profitability. Thus the compensation plan is built with incentives not to sell, but to recruit, recruit, recruit more customers, er I mean sales people!

The value I’m offering is saving people thousands of dollars and preventing lots of stress and heartache when they realize LuLaRoe is not a “business opportunity” but a giant MLM scam. Nice try, though.

I wrote you an email explaining how your math in your article is wrong… Not just. Little bit but a lot. And you didn’t respond. I’m all for offering people a valid opinion to help them make the right choice for them, but if you’re going to be snarky then maybe you should also respond to emails.

Between two toddlers, a full-time job, and full-time graduate coursework, I have been a *little* busy. I’ve stepped away from my blog for a few months. Now, on my holiday weekend, I am playing catch up on comments and emails. I will get to your inquiry shortly; however, I have triple checked my math and had a few mathematicians do audits. My math is correct. But I’d be happy to go through it, step by step, with you, if you’d like.

So you’re saying that you’re too busy to respond to an inquiry, but not busy enough to do all this math? First of all, they are not expecting you to sell at the “middle” retail level. All consultants sell at the top retail price. The profit on the clothes is anywhere from 50% to 60% a piece; depending on the piece of course. And you’re talking about “business expenses” as though it is outrageous to need supplies. You need supplies for any business. You use a computer and the internet at the VERY least to write your blog; these are not expenses? Why would you go into a this big of an investment thinking that you won’t need supplies?

Second, who in their right mind thinks that their $5500 investment is going to pay off right away? Some consultants have done it in weeks; some in months. But if you’re going into this expecting an immediate result, you’re definitely in the wrong place.

By the way, after you “pay off” your initial investment, the profit from anything else you sell goes to *gasp!* business supplies, taxes, buying more inventory, and IN YOUR POCKET, since you’ve already paid off your investment 😉

PS I think some of you need to look up the definition of pyramid scam.

I believe what I was saying is this blog is my hobby not my full time job. I have other things in my life that take priority, like my family, my job and sleep. I’ve posted an update to this original piece here. And, you’re lucky, because I am exhausted and have zero venom left for this comment. Have a good night.

I have to agree with Anna. Your math is correct, but your numbers are wrong.

1. There are 4.333 weeks in a month (52/12 = 4.3333) not (4). 2. You would not multiply the 101 by the average of $18 profit because after you made back your initial investment, everything after that would be profit. Therefore, you would need to multiply the 101 remaining (which would actually be 77.6 after applying #1) by 32 (18 profit + average of 14 per piece = 32) = $2483.20 —–based off of your numbers. 3. If that chart was correct and it takes 70 pieces to make back your investment, then you would be at $0 after 70 pieces and not -$406 —if the chart is accurate.

Everything after that is incorrect. Trust me, I really wanted your information to be correct, but it’s not. I would gladly send you a spreadsheet with accurate numbers if you are interested. Let me know if you find more information please.

Your math may be right but you are pricing items at an average price of $18 which is incorrect as nothing from LLR sells for $18 retail. The leggings sell for $25 a pair. ($5040/280= $18)

Let’s low ball and price every item you sell at the same price point as the leggings, which are the lowest priced item the company offers. If we sold 280 items at $25 each, your total sales would be $7000. Still making a profit over the original investment of $5500 and you’d have 101 items left to sell at $25 a piece which would give you another $2525 in sales bringing you to a total of $9525 in sales and $4025 in profit only selling the lowest price item. It’s been reported that the average profit per item is $18, maybe that’s where you got your number from? Nonetheless, as I said, your math is in fact correct, but you are using the wrong numbers so it’s a moot point.

My wife is looking to get into this and wanted me to look into the financial side of this (I’m an accounting/finance major and I LOVE numbers). I started by searching the internet and your site was the first one that came up. When I read through your numbers, I was a bit alarmed that a company could get away with this. But, I continued searching and found numbers that were drastically different from yours. So, I did the math independently. Here is how I did the math: Average inventory cost is $14.43 ($5,500/381) and the average sale price is $32.81 ($12,500/381). To be conservative (like any good accountant), I rounded the cost up to $15 and the sale price down to $30 leaving $15 profit for my analysis. If you are not repurchasing inventory you would need to sell 184 pieces (184 * 30 = $5,520) to pay-off your original investment and have a self-sustaining business. That way you would cover the $5,500 (plus have $20 in your pocket) and have 197 pieces of clothing left where every remaining dollar of sales would be considered profit. However, from everything else I read online they suggest at least purchasing back the inventory that you sell. If you repurchase your inventory as you sell it, you need to sell 367 pieces ($5,550/$15) to pay-off your original investment and have a self-sustaining business. This would leave you with $5 in your pocket and inventory of 381 pieces (whole sale value of $5,500) that was paid for by the profits. The significant difference between our math is that you are double counting the cost of inventory by only using the profit ($16 in your example), instead of gross sales and then also including the purchase of new inventory. Either you need to use gross sales or remove the repurchase of inventory. From what I read online and listened to on YouTube, most sales average 25-30 pieces. My wife was thinking she would be able to dedicate enough time for one sale a week, so it would take less than 4 months to pay off the original investment and make the business self-sustaining (25 pieces per week*4 weeks per month*4 months = 400 pieces). Most start-up businesses would kill for that short of time to profitability. I also have to admit that there are several other financial variables that should be considered like other start-up costs, taxes (largely income & FICA), credit card fees, shipping costs, give-aways, etc. Being the nerd that I am, I actually built out a more complex projection and in the end came out with similar results. Ultimately, I see the financial side of the business as reasonable, not something we are expecting to completely replace an income, but definitely not as bad as your original analysis. Just thought I’d leave my 2 cents for others to consider.

Casey – Slander would mean it is false – and everything that Mrs. Bottlesoup stated – is true. In fact there are so many pages of ‘reviews’ of LLR, that the pages take the top spots on Google – before you get to the LLR Website – unless you count the paid for Advertisement Top Spot. To date there are 107 BBB complaints – 48 of which are unanswered by LLR. And no one made you read this Blog. You were not sat down in front of your computer and forced to read this Blog – please stop drinking the kool-aid. People have thrown away thousands of dollars – for nothing…

When reading the article it was immediately obvious to me that the math wasn’t working out. Gross sales vs net is actually a thing if you’ve ever run a business. On the conservative side, as mike pointed out the margin is still great and the profit turn is accelerated much more quickly than many other riskier business ventures when you look at the wholesale costs vs retail retail. The model is similar to every retail establishment in existence. The one thing they don’t advertise is that, as pointed out in the article, the consultant is fully in charge of their own marketing and distribution. It is no get rich quick scheme. It requires both management and sales skills. As he pointed out above it needs to be looked at from the self sustaining inflection point. Many things she said in the article are true and make sense, however ignoring the gross sales is a huge error on her part. Using her initial numbers and estimated profit of $18 per item, even subtracting a full rebuy of $5,500 you end up with an initial net of $6,858 once 381 items are sold. Of course you must subtract all other expenses including shipping, mileage, marketing material…etc. Say all that costs $2k, thats still $4858 profit at an eventual full sell through of the initial inventory, that’s a pretty good profit margin and you’d still have a full inventory to continue selling. Which would be worth another (gross $12,358) or $6,858 in simple profit.

If you are reading this and don’t realize the flawed math in the original article, most likely you’re not cut out to take on the challenge of having to run a business. If this article saves people from making a big mistake by not understanding everything it will take to succeed, then I’m glad as it will save them the heartache. But seriously the “math” used to bias the article is a bit ridiculous if you actually think about it for a moment.

The goal is to be informative to my readers. I published an update due to the miscalculation in my original post. Yes, I made a mistake in my original post. However, the facts about direct sales and MLM companies remain true. Statistically, it is almost impossible to profit from these types of businesses, and I will not be apologizing for preventing people from falling into this trap. I’ve said it before and I’ll say it again: if this was a foolproof way to earn money, the company would pay its “consultants” a salary. It doesn’t. And no, that’s not entrepreneurship, because these consultants have no actual autonomy when it comes to making business decisions. There are rules and restrictions on how they can market and sell their products.

It offered a lot of value to me. That I would have to work more then 40+ hours a week to be able to substantiate the possibility of making a dime!!! That’s what these things do. Sure you might do well…like with Avon and so forth but the bottom line is you are not going to get rich off of this and you have to continue constantly in order to be able to get the best product, because most of what I have seen people are fighting over what little bit of good stock they all occasionally get. It is spasley divided since they don’t make more then 5000 per print. Heck on Ebay they are trying to sell that magic unicorn in a perfect world that just poops skittles all over the place.They are hoping that someone will pay that magic number. Well let me tell you what…there is nothing in my life worth paying that much for. I noticed when I have purchased an item that they don’t always give you the price and then they invoice you and it’s much higher then what most people that are selling their leggings for $25…my mistake, should have asked before I said “SOLD”!!!

I think that this was very informative and I feel that those of you on here trolling seriously need to get a better hobby. Anyone can look at the breakdown and math and understand the basic concept.

I feel that for the most part numbers don’t matter with things like this it’s all about marketing and whether or not you are a good sales person.

I know this post was intended to break down the cost of startup and find out if it’s a good investment but I want to point out a few other things.

First off I would be interested to know how much these companies make off people who buy in and don’t stick with it. Yes, this is the individual’s fault, but, a company who truly believed in their product would be helping people sale and offer a small buy back option, just saying.

Next, YOU DONT CHOOSE YOUR CLOTHES. Let’s say you buy in and worst case you break even and keep the rest…..you have random sizes, prints, styles and probably a couple repeats.

Make sure you have the storage space, I would assume some people fail because all the excess stuff is annoying and they have no storage.

CONSIDER YOUR AREA. Look up average cost of living, also look up median income this can help you see if you will get top dollar, break even or end up in the hole. Along with considering your area, think about the style of the majority. Are there markets? Events? Parades? Is the location good for pop up events? And so on…..

Consider your style and be honest with yourself. If you like the product, you would wear it, you look good in it and have friends with different body types and maybe if different ages….ask them their thoughts. Is the product versatile or are you trying to sale leisure wear to suits?

I’m sorry but I have seen so many people trying to sale shakes, make up, knives, clothes (insert pyramid scheme here) and they don’t have information when people ask, they can’t put on make up or rarely wear it and yes; I have seen overweight people posting pictures without results and swearing by the magical weight loss abilities.

Anyways, that was a lot but my point was regardless if the math is off a little or the price point is “obscured” some of you are assuming that you will eventually sale all of the leggings and you probably won’t. There’s going to be a huge pair, or an ugly design here and there that is sold under market value. Many people will sale off the rest or give it away at a yard sale.

Just be honest with yourself. 1. Are you a salesmen 2. Do you believe in the product 3. Are you willing to give it a shot and be stuck with the rest and lose out on your money

….just saying Don’t be having a million dollar idea on a tax refund budget. Put that money in the bank for your kids and leave it be. Teach them not to give into our “buy” society.

Last thought, if you are considering a start up JUST PICK ONE! Don’t pile stuff up or swap around then you just look desperate and you won’t be successful Do your research

I just checked out LuLaRoe’s website and I have to say that the clothes are overly bright and they have Aztecs designs, both of which I find very unappealing. Aztec prints and turquoise jewelry…. Are two things that I will pass on. As to these companies operating legally makes me laugh. Most of these companies are based in Utah, “the Scam State” which has laws protecting these pyramid scheme companies and the Federal Trade Commssions lacks the manpower to go after these companies. Also, unless there are numerous consultant/consumer complaints to the Attorney General and the FTC these companies are allowed to exist because they are not high priority. I have talked to agents at the FTC and exposed another pyramid scheme companies grossly exaggerated compensation plan and was told by the FTC that they are aware that these companies do this to lure in customers aka consultants but all these companies do it. The only recourse if one becomes a victim is to report them to the FTC, Attorney General and Better Business Bureau, and perhaps the IRS. Maybe after many complaints these agencies will take notice and action. Also, don’t be afraid to tell others of your story because you could be saving someone thousands of dollars, stress and heartache.

Great comment! Women who have participated in these MLMs/direct sales companies should not be scared to speak up. I don’t blame women who have fallen prey to these schemes. They make it sound so good! But, I do feel like once you know it’s a bad idea, you need to speak up and help others prevent falling into the trap.

I think nearly all of us have been tempted by an MLM at least once, especially when we’re young and naive. The biggest turnoff for me that kept me from falling for the scam was the cult like “training” that was mostly just cheering and chanting affirmations. Something you’re leaving out of your math, but is hard to quantify are the trade off costs of doing this versus an actual real paying job, even a minimum wage one. There’s also the cost of gas, car maintenance, office supplies, having to pay 100% of medical, taxes, inventory damage/loss (cause it’ll happen).

I’m the miserable person in the local FB jobs group who posts strong cautions for every MLM scam I see. I’m made more than a few cult members (aka, “business” owners, lol) irate for doing that.

Thank you, Isilzha! You may be interested in my update to the LuLaRoe piece here. Thanks for reading! Totally agree – MLMs are – in my opinion – total scams. Any other MLMs I should look into for the blog?

I like your last statement. This is saving me thousands of dollars and even more stress. I signed on to become a consultant but it cost even more than just the inventory. It was going to cost me almost another $1,000 just for supplies. I noticed that the consultants I follow on Facebook aren’t selling crazy numbers. Their inventory just sits so I don’t believe that you get your money back sooner then later. Unless you can eat, sleep, and breathe LulaRoe.

Precisely! 🙂 Very good observation, Christina. There are lots of LuLaRoe groups, but many of them have stalled and their inventory just sits. It’s in the best interest of the direct sales model for “fashion consultants” to act as though business is booming, but in reality most women are being exploited and I’m trying to bring that to light with my pieces on direct sales and MLM companies that target women.

Actually, it’s 85%. So, you can pay them 15% for not being able to sell their product, which is $750 on $5k. If their product was so fabulous, they would buy it back for 100% and sell it to someone else.

I have to agree with ClothesareUgly. I like the comfort of their pricey leggings and some of the tops. I recently went to a show with 3 consultants. I found only ONE outfit that I liked, but it wasn’t in my size. No one else had the print! I was looking for clothes for work. I am looking for comfy clothes for work. If I showed up in some of those outfits, I’d be sent home to change. Can’t believe they have so much ugly inventory. And what’s the deal when they divvy up the holiday specific (Halloween, in particular) prints to the consultants. I found one who had crap loads of Halloween and another who got none. Not interested in consulting, but I could take that seed money and invest it in other means and get a better ROI for the future.

Miss Bottlesoup you must be doing something right because I just googled Jamberry Scamberry and found that women are reposting your blog on mommy threads and warning other ladies that Jamberry is indeed a Scam! Jamberry Scamberry is so catchy and I hope more women decide to steer clear from Jamberry altogether. It’s truly not worth your time or investment. And Nailwraps being non-toxic my ass…they are made out of pvc…do your own research about this product and the nail damage and nail fungus…and ask yourself do you really want to peddle this crap to your friends and family? If yes, I hear the tobacco companies are hiring people like you who have no souls.

I’d like to say something about jamberry. I’ve been selling it since March 2016. and I loved it at first. but now, I can’t stand it. honestly if I could get my money back for all of the wraps I have purchased, yes, I ended up putting more money into it than I’ve actually made just to help keep myself “active” each month. for the 8 months I’ve been with scam berry, I have not “gained self confidence” that I didn’t already have, or “felt prettier by wearing these wraps” in reality this company made it worse for me because they tell you to pretty much “hit up” your friends and family with these products and post in your Facebook groups every day about this product and that product and b3g1 free here and sell 33,000 PRV in order to go on a trip to Punta Cana. so after you’ve pushed all the jams down your friends and family’s throats, now they are avoiding reading messages (even if they aren’t Jamberry related messages) because they think you’re trying to sell them something, and you’ve gotten to the point where people are unfriending you because the notifications from the fb groups are so annoying, Jamberry hasn’t boosted anything but now you’ve spent $80 to get yourself past that “active” point and you’ve lost friendships, you are mad at yourself for not being able to sell those new bundle deals. you have to find a way, any way to get up to “active” next month too so you don’t lose your consultant level. what I’m trying to say, if you haven’t figured it out, it is a giant scamberry pie that I wish I never dove into. “wear these amazing nail “shields” that will help brittle nails grow strong” my nails are 80X worse than before I started wearing jams. “run your own business! be your own boss!” I am under their microscope 24/7, because Heaven forbid I sell my OWN personal stash of wraps, I will be shunned by HO and probably booted from the company. just take a look at the P&P. you can’t do what you please with “your company” or you’re done! “recruit! recruit! recruit!” who? who am I going to recruit? oh. you mean the dozens of women who said no thanks to free samples, let alone purchasing anything? yea this DS company sounds like big bucks in the beginning, promises of being your own boss and creating your own hours and selling amazing product just to make a measly 33% commission on sales if you can get them, I dumped so many hours of non stop marketing and advertising, for what? maybe a total of $300 profit (not including my own purchases) in the last 8 months. if you want to start your OWN business, don’t do it by joining a DS company as a “consultant” you’re not a consultant, you’re a slave. you make lousy money and you can’t even sell your own stash of wraps or lacquers without being punished. oh, on the other hand. they do have pretty wraps, my nails take a lot of work to get them to stay but the wraps are nice, but that lacquer… chips off within hours of applying. I’ll stick to my pharmacy bought polish. so please. save the frustration of joining scamberry, save the relationships with your friends and family. don’t buy into their scheme. you aren’t your own boss. I wish I could go back in time and not join. I will be hanging up my hat by December. it’s not worth it. I promise you.

Brit, I’m sorry you had that experience but I’m very happy you decided to share this information with my readers. It’s best and brave to speak out against things like this; you could easily be embarrassed and hide behind that shame, but when women like you speak the truth about these companies, that’s what’s truly empowering.

THANK YOU! This couldn’t have been explained any more clearly. As a fashion consultant you are not a “small business owner”, you are a CUSTOMER of Lularoe. The company is taking zero risk! They’ve sold to their consultants and made their profits. Done and done. It’s the consultants who end up stuck with hundreds of ugly, tacky, unsellable pieces after a few cycles of replenishing inventory.

It’s fine if you actually end up making a profit… Actually, good for you, you defied the MLS odds! But, think for a second and take into account how much of your time you had to sacrifice. How many hours were you logged in on Facebook?? Dressing up mannequins to take pictures of products, arranging and organizing merch, editing and posting pics, chatting with customers, answering emails, tracking sales? Finding willing hosts, loading your car to go to a pop-up, unloading your inventory and setting up your pop-up, the travel time to and from this single pop-up, the cost of snacks and refreshments to keep your friends happy as they browse your items? Time spent packing items for online orders, printing/writing shipping labels, driving to the post office? I’m willing to bet all of this work, especially the time spent on any and all forms of social media promoting, easily exceeds 60 hours per week. So break that down hourly, and it’s probably less than minimum wage in the grand scheme of things.

Time is precious, not money. I’d rather work an easy going minimum wage retail job with guaranteed part-time hours than deal with all of the above, just to play pretend that I’m a “small business owner”, who still has to answer to and play by a corporation’s rules on how I can run my own damn business. Not to mention irritating and alienating family and friends who are made to feel like marketing targets if I really “push hard for success”, because failing would be 100% my fault.

THANK YOU for this. The math is so helpful to me…to see it explained and simplified. I’ve been in the ‘queue’ to become a consultant for two months and haven’t really felt like I wanted to do it. I do enjoy the clothes, I think they’re cute and comfy. I just feel like the market is over-saturated and the initial investment is exorbitant. In addition, I’d have to invest in clothing racks, totes/bins, business cards, shipping supplies, etc.

Just read your review on KEEP and then saw this one too. Thanks for explaining everything so clearly. So my question is this are any of these companies actually worth doing? Is there anything that can actually help families instead of just scamming moms who are trying to do all they can.?

Unfortunately, MLMs and Direct Sales companies are not viable ways to earn an at-home income. The best things you can do are discover ways to save money, or learn a valuable skill that you can execute at home (like app coding, billing, professional writing, etc.).

This is 100% untrue. Direct Sales companies including LuLaRoe are absolutely great ways to earn an at home income. I have tried many and they don’t all work for everyone, but hard work and dedication they do work! I have been selling LuLaRoe for 7 months and in 4 months I paid off my initial investment and have now REPLACED my full-time income, was able to quit my job and stay home with my family, and have earned a free cruise from the company. To say this is a scam is absolutely ridiculous and not true. No direct sales are not for everyone, but for some people they are! Especially if you are a hard worker and determined to succeed and find a way to provide income for your family while staying home. I have seen so many lives change by direct sales companies so this is completely a biased opinion blog. Please learn to keep an open mind and realize that not everything is for everyone, but some things are for some people and to put this idea in everyone’s head for people who are determined and have the chance to change their lives is not giving them a fair change to live their life to the fullest and learn through their own trials and errors.

Have u been in a direct sales business? If not then you have no idea if it will work. I haven’t myself either but sales is sales. I own a few retail businesses. I buy wholesale and sell retail. I profit the difference less soft costs. It’s the same in this business and others. If I were them I would make it be $5k to start as well . If a person is not willing to spend that then they are probably not dedicated enough to partner with.

No, I have not been in a direct sales business, but I can have more than an idea of how it works. I have actual information from people who’ve done it, the documents and contracts themselves, etc. It’s not the same in a direct sales company like LulaRoe, because in your sales based business, you have control over how you market, what you purchase, where you sell, etc. LLR has restrictions on everything that actually limit the consultants abilities to be successful. It’s sad.

Took me a minute to realize why this article irritates me so much. The reason for it is because of the blame placed on the company for making a profit. That would be for any wholesaler. No one does it for free. That’s why we live in a capitalistic country . Every company in our nation wholesaler or not is out to make a profit. Lularoe sales people do make a profit and I am speaking from experience. and allows women to stay home with their children while making a little bit of income for their family. That’s why this article irritates me is the negativity and condescending attitude and said of the support of women and their families. The tone of bitterness just disgusts me

If you have found it works for you and you like it, then why are you so sensitive about defending it? Own your truth. I suspect you know it’s not as easy or profitable as you wish it was. My only suggestion in the article is that you, yes, own your own business but diversify your inventory like other retailers. That way, you’ll minimize your risk. If you took it another way, then that’s on you. Have a good one.

My close friend just started as a consultant and I feel bad for her. When I saw the clothing, I thought it was cute but when I asked her the price of a dress, my jaw dropped. $45 for a casual dress? I recently bought three dresses on sale for $30 at a local retail shop. Old Navy has awesome sales on everyday casual clothes for soooooo much less and the same quality. With so many stores like Platos closet, thrift stores, Old Navy, etcc….where you can get quality clothes for cheap, I just don’t see this asite a good investment. I wish I had read this and shown it to her before she started.????

Najel, I’m sorry to hear about your friend. It’s a delicate situation, now, because she’s invested a significant amount of money, but I think if you feel comfortable and have the opportunity to do so, it’s worth having a conversation with her about LuLaRoe and how they operate…before she’s sucked into ordering even more inventory to “grow her business.”

I have 17 friends who are now consultants and every single one of them has made their money back within 5 weeks. Working part time. 3 of them are making over $5k/month. One of them is pulling in between $11 – 13k MONTHLY. None of them has a downline. None of them harasses people to buy. Yet they make great income selling clothing in online parties. I have several items from lularoe…..the oldest 3 items look just as good as they did when I bought them when the company first launched. It’s stretchy, it covers, there’s no fraying or seams falling apart and you can’t see through it. I’d say that’s a pretty good investment.

Been reading all this.. and you make good points but lost me when you included shipping. When we send out our mech to customers… they pay for shipping not the consultant… ??? do you lost me there…. My wife is a consultant and these comments are a bit silly.. I like your math but it seems your math is for someone who isnt willing to work this like a full time business. And quite frankly… why would you not if you are going to invest that much in business.. I had a successful business for over 20 yrs online. So i have a bit of and edge on marketing.. and duh… yes , you have to be very savvy in marketing…. no kidding…..??????? im lost on many of your comments and others responding…. I liked how you broke it down but again, sounds like if you are moving smaller amounts of inventory.. you will be CRUSHED in 6 months.. i would suspect that that is what will happen to most of these fly by night consultants with LLR and other MLM’s….. have you ever heard of Mary Kay?? why does it still thrive???? Hmjmmmmmmm MLM……. amway???????? pampered chef?????????? OF COURSE YOU HAVE TO TREAT IT AS A BUSINESS.. HELLO??????? MAKES NO SENSE…

I feel bad for you, you don’t have an open mind at all. Your so stuck on people that don’t make money that you don’t see that there are people that do. I’m not a consultant and I do have friends that are making $5000+ a month selling. And that is all profit. If your a driven individual there’s not anything you can’t do. And to avoid another snarky comment from you, yes they are my CLOSE friends who share everything with me. All your doing is putting down people. Your in grad school right? I couldn’t tell. Does that sentence sound rude? Good because every comment you make to someone who is defending Lularoe is rude. There’s a way to get your opinion across without being rude.

I recently met my FIRST LLR consultant who just started 3 months ago. She invested her $5 or 6K, 6 clothing racks ($75 each), baskets of leggings (at least 7 of them), and had those hypnotic circles in her eyes when she told me how GREAT it was going… One girl walked out with ONE shirt at this show. It’s swap meet clothing that an 8th grader in 1970’s home-ec class could have made, and the fabric is low-quality, the prints are horrific overall, and when you put ANY price-point over $25, it’s now ridiculous. They have a BBB rating of F in California. Simply go to the BBB on Google and read. Nothing here is slander by Bottlesoup. They started out with some fun leggings, and the founding couple have gone on to the the Jim and Tammy Faye Bakker of the home-business industry, imho.

I agree 100% with you Katie S. BOTTLESOUP you have no idea what you are talking about! I have 4 friends that also sell and they tell me all the time what they are making!! It’s also not a pyramid scam people. No one is under them and no one needs to sign up. I’ve never been bothered by any of my friends to sign up, they get nothing from me by having me sign up so get you’re facts straight!

I have purchased a few LuLaRoe items, and now deeply regret it. I bought a kimono from them, and paid over $40- regret city- because I found an even better one, made out of ORGANIC cotton, on Etsy, for LESS! Which I will be buying! Most of their clothes are made from polyester, which is a hormone disruptor- so don’t live in it if you do have polyester clothes, and most of their clothing is made outside of the USA. They do have some pieces being manufactured in the US, out of fabric made elsewhere, but those pieces are dry clean only! ARGH! I don’t want casual clothing to have to be dry cleaned, it adds to my expenses! I will probably keep the few items I own, but will never buy any more… also, the darn Randy shirts pill up like there is no tomorrow. I seriously considered becoming a consultant, so I sat down with my husband and ran the numbers. This article is spot on! YOU, the consultant are their customer. The mark up is insane! You DO have to continually take the money you’ve earned from reselling the items and pump it back into your inventory. The fact that you have zero control over your inventory patterns is crazy! Some of their designs are just plain old ugly. I know, I know, there’s something for everyone. But I do know some consultants who *still have some of their original pieces* because they just don’t sell. Quote from an article about the chemistry of polyester, “Researchers at Tufts Medical School noticed that cancer cells being grown in the lab multiplied more quickly in polyester test tubes than in glass. It appears that polyester slowly emits phytoestrogens, which are endocrine disruptors, or compounds similar to estrogen, which can promote certain types of cancer. Enough people are worried about these chemicals that entire conferences are being held to discuss their possible effects. You can see the concerns of the scientific community reflected in this list of topics at a conference being held as we write: http://www.grc.uri.edu/programs/2002/enviend.htm” Find the article here http://www.diaperpincorner.com/2000/04/artificial-materials-cloth-diapering/ Yes, this is an article about diapers, making your own, etc, but the chemistry is sound. Here is another quote, “Polymer Chemistry 101 It is probably a good idea at this point to back up a bit for some chemistry 101. Basic polymer chemistry isn’t too complicated, but for most people the manufacture of the plastics that surround us is a mystery, which no doubt suits the chemical producers very well. A working knowledge of the principles involved here will make us more informed users. Polyester is only one compound in a class of petroleum-derived substances known as polymers. Thus, polyester (in common with most polymers) begins its life in our time as crude oil. Crude oil is a cocktail of components that can be separated by industrial distillation. Gasoline is one of these components, and the precursors of polymers such as polyethylene are also present. Polymers are made by chemically reacting a lot of little molecules together to make one long molecule, like a string of beads. The little molecules are called monomers and the long molecules are called polymers. Like this: O + O + O + . . . makes OOOOOOOOOOOOOOOO

Depending on which polymer is required, different monomers are chosen. Ethylene, the monomer for polyethylene, is obtained directly from the distillation of crude oil; other monomers have to be synthesized from more complex petroleum derivatives, and the path to these monomers can be several steps long. The path for polyester, which is made by reacting ethylene glycol and terephthalic acid, is shown below. Key properties of the intermediate materials are also shown.

The polymers themselves are theoretically quite unreactive and therefore not particularly harmful, but this is most certainly not true of the monomers. Chemical companies usually make a big deal of how stable and unreactive the polymers are, but that’s not what we should be interested in. We need to ask, what about the monomers? How unreactive are they? We need to ask these questions because a small proportion of the monomer will never be converted into polymer. It just gets trapped in between the polymer chains, like peas in spaghetti. Over time this unreacted monomer can escape, either by off-gassing into the atmosphere if the initial monomers were volatile, or by dissolving into water if the monomers were soluble. Because these monomers are so toxic, it takes very small quantities to be harmful to humans, so it is important to know about the monomers before you put the polymers next to your skin or in your home. Since your skin is usually moist, any water-borne monomers will find an easy route into your body. Polyester is the terminal product in a chain of very reactive and toxic precursors. Most are carcinogens; all are poisonous. And even if none of these chemicals remain entrapped in the final polyester structure (which they most likely do), the manufacturing process requires workers and our environment to be exposed to some or all of the chemicals shown in the flowchart above. There is no doubt that the manufacture of polyester is an environmental and public health burden that we would be better off without. You may not feel comfortable putting a potential endocrine disruptor next to your child’s most sensitive areas. What about some of the other fabrics and fabric treatments used in cloth diapering?” Check out out! I know, we’re not talking about diapers, or babies, but I know I sometimes wear my leggings commando to yoga… I know there are others out there who do to. I won’t be wearing any more polyester clothing next to my bare skin, ever. I have removed it from our household in order to prevent our tween from having premature adolescence, as is so very common now a days! (probably from all the chemicals in the water, food, fabrics, etc in our lives.)

Thank you for your comment! Yes, Etsy has some great alternatives. Etsy does have it’s own limitations, but it’s much better for small business owners than LuLaRoe, which is a direct sales company, not a small business supplier. Thanks for stopping by and sharing 🙂

There’s one major problem with your numbers. You say that after you’ve sold your initial inventory you are out of products to sell. But you aren’t. The average $18 profit is what you make after the cost of the product..after you’ve reordered that item at wholesale. So after you’ve sold all the items and made that money back that you quoted at 1 month, you should have reinvested the remaining $ and have a fresh new inventory to resell. I’m not a consultant, but I have a retail store and this is exactly how my business works. You purchase wholesale inventory up front, sell it at retail and keep the profit. I don’t understand how you view this as a scam?

Your math is wrong Mrs. Bottlesoup and now lots of other people have called you out on it even though you never approved my initial postings months ago. Have some humility to realize you are wrong and correc it.

Exactly. Thats the issue with the math. My bet is she knows it too (at least by now). She says she ran the numbers by mathematicians. Lol… who? This is basic business math. She has missing money equal to the purchase price. Either that is money she slated for the automatic reinvestment (meaning like you said you have a whole new set of merch to sell), or the money was swept under the rug b.c thats where she wants it for her misleading numbers. OR she said “repay your investment” when she really meant “double your money”. To me, and most readers, these are different concepts.

I dont disagree with the theme of her post, but the numbers she uses to prove her point need to be corrected.

It isn’t that hard to recorrect the math. You presented the math in a way which appears to show the reader that you make next to zero if you sell all the clothes. You forgot to take into account that the customer pays more than wholesale cost meaning everything above that is profit.

While I won’t lie the thought of selling LLR has crossed my mind; being a plus sized woman (though smaller, but still 14-16). One of the more trendier stores I shop at is Torrid, there is also Lane Bryant if you want more true to size clothes. Now while Torrid is the trendsetter by far, LB has definitely had it’s grandmom moments as of late. When I compare to plus size lines at major department stores like Macy’s, Jc Penny’s, Sears (though the new Emma line has gotten my interest) to the Charlotte Ruse and Forever 21 (easiest way to make someone who is plus feel 10’s bigger since their clothes run small!). LLR appeals to me as a true customer, not a consultant for how the items fit and slim me down. I do tend to go for the plain ones and every once in awhile a crazy print. what I am finding that keeps me a customer is the fact that I can go into Torrid or LB and spend more on similar items, but they have a lesser sustainability. Plus size clothing is already pricier than most and so when I compare the prices to what I already pay (outside the CR and F21 spectrum), the price is comparable. I am literally in groups with 18k and 20k women who show their style, their customization for this versatile line. I support my friends who sell and get what makes me happy.

I’ve known 3 consultants (and 2 more who are awaiting inventory) that have paid off their initial investment, debt, vacations, student loans – because inside the Facebook group world… you would be SHOCKED at how these women go nuts for the clothes. So while being a consultant may not be for one person, it is definitely changing the lives of many. I think it’s what works for you at the end of the day and i’m a happy customer as of right now since I have clothes that cover the parts that need to be covered and slim me down. I did enjoy the article and it helped me understand ALOT about the onboarding process.. But just wanted to give a different perspective.

I’m aware that women go nuts for theses clothes, and I appreciate your comment. However, as a business model, LuLaRoe is not sustainable. I’d love for women truly interested in retail sales and fashion consulting to branch out on their own by diversifying inventory and starting their own shops where they make the rules. Feel me?

Mrs. Bottlesoup – your article has provided excellent perspective for me AS I STILL PURSUE BECOMING A CONSULTANT! It’s crazy, I know.

I am compelled to comment on this particular comment. I agree with you that going out on your own would be great. However, from my perspective, LLR just makes it easier for me to get going – in a market that people are ready to buy in! And, as a plus size woman, I want to create opportunities for other women to buy clothing that accentuates rather than looks like crap. And it’s true – their clothes really do accentuate rather than make me look like an old frumpy mess.

What Lauren said above is precisely why I fell in love with the clothes and why I want to provide the opportunity for other women to buy as well.

I hate MLM. I hate direct sales. But as you stated early in your article – I will be retailer. And I realize it will be a ton of work. You have to admit that the business model is different than other MLM/Direct Sales companies.

I am not trying to change your mind. And I completely agree that your math is right. I’ve done the math myself. Your article actually helped me to come to terms of the reality of this business. But I want to continue regardless. I’m happy to report back, success or fail, another time.

So it seems your math is wrong. You are doing the math based on the profit per item, not the actual sales price. If you buy the package for 6k with 381 items. Each item ends up costing roughly $15. If you sell them with an $18 markup, you gross $12,500. Pay back the 6k initial buy in and made a profit of 6.5k. If you take 6k and buy more, you are still in the black 500. I do agree with you though that there is no way you will make 18 profit per item. My wife has asked me to run numbers to see if this is a viable business. I’m skeptical but still pulling data together from a few consultants we’ve met. My background is financial and business consulting. I’m leaning towards scam, but I’m all about the numbers.

I am not a consultant, but have a background in corporate retail and Business Intelligence and have reviewed the risks and potential of LuLaRoe.

Here is why so many people think your math is wrong… If you assume a noob would sell 280 items in the first month for $18 each, they would take in $5,040 Gross revenue. The average cost of items is $5,500 / 381 items… for average cost of $14.44

No consultant for LuLaRoe is selling their items with a $3.56 average profit per item… I understand the LuLa in Love chart differently… let me explain:

From the Lula in Love chart, NET PROFIT (the $5,040) is the amount of money you pocket after you figure in the COST of goods sold (280 items = $4,200 in this example. Your GROSS SALES are $9,240 in this example (using midpoint of high/low retail value, directly from the chart). This leaves you a PROFIT of $5,040 after you factor in your COST OF GOODS. Now this doesn’t include other expenses such as Shipping, marketing, display, storage, etc…

The error you are making in your calculation is that you assume in the example that the PROFIT somehow has to pay for the inventory… PROFIT is GROSS minus EXPENSE… in this case your TOTAL SALES $$ (Gross) minus the proportioned COST of the ITEMS SOLD is your total PROFIT.

The example assumes 280 items sold in 1 month at an average cost of $15. Mid retail price point assumes $18 profit per item. Mid retail price point assumes $33 price tag average…

Based on this simplified math, if you invest/spend $5,500 to start with LuLaRoe, if the average item sold has a suggested median Retail Value of $33, you would need to sell 167 items to recoup your investment. 167 x $33 = $5,511

For reference, my former company had apparel lines that they owned the manufacturing license. A $40 MSRP polo shit had a manufactured cost of $10. The Landed Cost to my company(retailer) was closer to $12. The typical Sale price of this shirt $25 to $35. LuLaRoe appears to be inline with these Cost/Margin ratios for what it’s worth.

The risk with LuLaRoe is similar to other retailers… you buy inventory with no assurance it will sell. You also are subjected to re-order minimums on a monthly basis. If someone is considering this as a business, it requires personal capital, storage space for inventory, and a strong desire to work 20+ hours a week… you will otherwise be on the hook to keep buying more even if you aren’t selling much. I think the biggest issue in the math that LuLa in Love makes is that a brand new consultant isn’t going to consistently sell more than 20 items per week starting without an existing customer base. It is my belief that 50% of the starting inventory will be odd sizes and styles… and this is inventory that will take MONTHS to sell. Therefore, if the break even point is 167 items, and you have only 140 good, easy-to-sell items in your initial shipment… even if you are a superstar, you’d be lucky to recoup your investment in 3 months… much less 1 month. If someone wants to make money selling LuLaRoe, it will require much effort. It isn’t a get-rich-quick business, but I do see more potential in LuLaRoe over many other work-from-home “businesses”. With more potential, you incur more risk.

actually, mrs. bottlesoup, as a certified public accountant and financial planner, i can assure you that your math is incorrect. let me break down why:

you are treating the $5,040 figure as revenue rather than profit. $5,040 = the 280 pieces sold a month at a PROFIT, not sales price, of $18. i’m not a consultant, and have no involvement with LLR, so i am not sure of the ins and outs of wholesale and retail prices, but they make it very clear that in their math they are assuming your net profit off of each piece is roughly $18. this means the consultant actually sells the piece for far more than $18–the cheapest item, the butter leggings, tends to sell for $25 a pair. $18 is the average item PROFIT, not the SALES PRICE.

so, now, looking at your initial investment of $5,500, it is NOT CORRECT to subtract the $5,040 directly from this number, as the $5,040 is profit, and thus by the definition of the term profit, the $5,040 would already be “net” of the initial $5,500 investment. this may be confusing to you, given that you didn’t grasp it in your entire article, so i’ll try to make it clearer.

they’re saying to repay your investment in about a month, you need to sell about 280 pieces. you paid $5,500 for 380 pieces, but you only need to sell about 280 of those to actually cover and make your investment back in one month. again, you are not SELLING these pieces for $18… you are making an *average* of $18 per piece when all is said and done. let’s say the average piece sells for about $40. this is perfectly reasonable, as the lowest-end leggings sell for about $25 a piece and the highest end cardigans/dresses can go for $60 and upwards. if you sell 280 pieces at an AVERAGE of $40 a piece, your REVENUE is about $11,200. THIS is the number you subtract your initial investment from… NOT the $5,040. subtracting the initial investment (cost/expense already paid/incurred) from the $5,040 puts you $460 in the whole… but CORRECTLY subtracting the $5,500 investment from the $11,200 REVENUE you would actually get from an average sales price of $40 a piece leaves you with $5,700.a that’s FIVE THOUSAND SEVEN HUNDRED DOLLARS in PROFIT, meaning not only have you fully repaid your initial $5,500 investment, but you’ve also made an extra PROFIT of over $5,000, which you can keep or partially/fully invest in more pieces, keep selling, etc.

not to mention, you have an extra 101 pieces to sell that month, and you’ve already recouped your investment, so you’re just concerned with the revenue on those pieces, as the $5,500 investment has been fully deducted from the previously estimated $11,200 profit, so if you sell the remaining 101 pieces even just at $25 a piece, you have an extra $2,500+ of solid profit in your pocket with no additional cost to cover/deduct other than shipping/operational costs.

so. recap. if you pay $5,500 for 381 pieces and sell the first 280 for $40 a piece, you have total sales revenue of $11,200 on your hands. if you subtract your initial investment of $5,500 from this, you’re left with a PROFIT, in your POCKET to spend as you wish, of $5,700. if you manage to sell the additional 101 pieces even at only $25 a piece, that is an additional profit of $2,525 in your hands. $5,700 + $2,525 equals $8,225. you shouldn’t really have overhead or operational costs as you are one person working from your phone or computer… so your main additional cost is shipping. let’s say every single piece ships separately and costs you $6 to package and mail out (that’s two-day priority mail with USPS in a small flat-rate box, which any one LLR item would easily fit in). 381 items at a packaging/shipping cost of $6 a piece means operational costs of $2,286 for your entire startup kit of 381 pieces.

that is money in your pocket that you can reinvest in your consultant business, put in an emergency fund, use to send your kid to college, whatever. any way you use it, it is almost SIX THOUSAND DOLLARS of freely spendable profit that you made by successfully peddling the pieces in your LLR starter kit. even if shipping ends up being more or if you have any unexpected cost, you literally have $5,939 to LOSE before you are in the hole. any of that figure that you get to keep is money you didn’t have before and i think officially makes the investment a success.

anyway, i understand this is a simplification in terms of the selling price and costs, and specific combinations of inventory will yield different results, but overall, your math is grossly incorrect, and as i’ve chosen to devote my life to helping businesses and people report and budget their finances honestly and accurately, i had to let you know you are putting out false information and i had to explain exactly why.

i personally would never choose to be a consultant as i find it extremely risky (what if you get 381 pieces that no one likes, and the consultant next door got the 381 most desirable pieces, and you sell nothing?) so we are on the same page in that regard. but please don’t mislead people on the finances of consultantship just because you’re hell-bent on making a point about how LLR is a scam, when really you are not actually involved in it.

lastly, i apologize for the parts of my comment which sound/are condescending. i was reading how you have responded to some people and it riled me up quite a bit. but i understand it must be frustrating to have to sort through as many comments as you do and have so many of them be rude. sorry for having added to that. i just want to make sure people reading this article who are taking your math at face value see that it is not actually accurate. i know $18 profit per item is unrealistic, but if that were the actual average profit, LLR’s math in their graph actually checks out entirely.

Agreed. Multiple people have pointed out her math errors but she is arrogantly unwilling to re-think through it and immediately dismisses the profitable experiences that multiple (thousands) of consultants have had with this company. If you have considered becoming consultants, please continue researching through other more reliable (perhaps firsthand!) sources.

Not true. I posted an update here. My opinion is that LuLaRoe is still a terrible idea, as the profit margins are not in line with the industry. But, as far as the calculation flaw, I’ve owned it. Thanks.

Thanks for being intelligent Ian. I’m not a LLR consultant but I do have an MBA and am married to math teacher…before blasting something you should probably realize how to multiply. Even if you only sold the items for $20 a piece (which the cheapest item is kids leggings running at more than that…) it’s still 7620….

I think the biggest challenge with this is not being able to pick what you get – consultants get loaded with inventory they cannot sell which makes it challenging. But as for the math? If you can actually sell what you get you will make money.

Well written, TY. I’m not interested in becoming a MLM but I was curious as I have quite a few acquaintances that are doing either Lula or some other direct marketing. I do sell online via poshmark and plan to open an online shop next year off my blog but it will be merchandised/curated very specifically by me. I’ve always had an interest in retail as well and have worked as a controller for a major retail company and as a salesperson in college. The thing that concerns me for friends that are getting lured in is that the buy for Lula is not at the consultants’ discretion. From what I understand they cannot select the prints/colors although there is some discretion on the sizes (& maybe styles). On the first drop ship I’m not even sure if they can make any requests at all. This left me SMH. The company has eliminated any risk for non sell-thru or dead stock (stuff that doesn’t sell) as all that risk is being transferred to the consultants. Any losses from markdowns or non-sales will be incurred by the consultants. Which is normal for retail except it’s normally a calculated risk based on your skill & experience to select items to buy for your customers and to know what mix of margins will keep you profitable. Lula corporate has basically come up with a model to be able to sell their customer whatever they choose and the minimum first sale is close to 400 pieces (I’m assuming based on the math above). Their consultants are at their mercy in terms of merchandise and margin. That blows my mind. Especially when you can set up an online or pop-up apparel boutique in other ways, by buying smaller wholesale lots from LA fashion wholesalers for example. And there are tons of thicker comfy stretch jersey items available from these other wholesalers. If one is good at styling and marketing there are other ways. I think the competitive yet bonding method of selling is definite driving the trend but I’m not sure if that’s sustainable. I definitely appreciate the focus on modesty and comfort but that can be done via other wholesale channels.

The company will buy back any merchandise you can’t sell at a 15 percent restocking fee. So while you do lose some money, it isn’t quite correct to present the picture that Lularoe shoves this merchandise off on you and you’re stuck with it if it doesn’t sell. In addition, the fact that you cannot choose colors or prints, only styles, means that you have different inventory than the consultants near you, which means you can share customers. And the consultants frequently swap pieces that don’t sell for them with each other so they can get new patterns and prints. Finally, there are enough girls that are making money at this, or at least buying, that you can easily sell off the pieces you aren’t able to sell to other consultants at wholesale prices via buy/trade sites. I respect your opinions, but I also had some insight here, and I just wanted people reading to have all the facts.

If you invest $5000 and they buy it back, it costs you $750 (15%) to make that mistake. It’s not something to take lightly. And, as retailers will take their products back with no restocking fee, it is really disturbing that this is being presented as some sort of grace on behalf of LLR. If the product was so valuable and hot – if, indeed, people could sell it for a 50% markup, then LLR would take it back at full refund.

“The company has eliminated any risk for non sell-thru or dead stock (stuff that doesn’t sell) as all that risk is being transferred to the consultants. Any losses from markdowns or non-sales will be incurred by the consultants. Which is normal for retail except it’s normally a calculated risk based on your skill & experience to select items to buy for your customers and to know what mix of margins will keep you profitable. Lula corporate has basically come up with a model to be able to sell their customer whatever they choose and the minimum first sale is close to 400 pieces (I’m assuming based on the math above). Their consultants are at their mercy in terms of merchandise and margin.”

This, times a million. It is the weirdest way to run a retail business I have ever heard of, although it is super-great for LuLaRoe corporate. They don’t even have to deal with storage cost on deadstock – they ship everything to the “consultant” and let her deal with it. If it sells, if it doesn’t sell – not their problem. Which would be acceptable if they either A. let consultants pick what inventory they want to try to sell, or B. accepted returns of unsold merchandise, even if they only gave a fraction of the wholesale price as a refund. SMH.

Wow. This is the stupidest thing I have ever read. 1 plus 1 still equals 2 even if a blog says otherwise. The clothing is sold at retail and if it is discounted that is foolish. I operate a fair sized business of my own and my wife is a Lularoe consultant. All you have to do is buy merchandise for wholesale prices and sell for retail prices. Nothing complicated or unscrupulous about that. The investment is tiny compared to other businesses and the profits are there for those who will work for them. Writing articles like this and scaring people away from a great opportunity is unethical. They that can do. They that can’t do teach. They that can’t do either criticize. Btw. What poor companies are making these clothes? Did you mean countries? Half of these clothes are made in the USA.

For this being the “stupidest thing [you] have ever read”, you’ve certainly invested a signifiant amount of time commenting on my blog. You’re oversimplifying retail sales, and this article has clearly outlined and defined the business model. I can’t see what you would disagree with, if you were being honest and objective. Sadly, you’re not. And the amount of time you’ve invested in defending your “wife” and her LuLaRoe investment is disturbing. And, before you come back with some ridiculous come, the reason why it’s ridiculous is because your stance and comments are not objective; you and your wife have something to gain from LuLaRoe – I do not. I’m simply sharing the true facts about LuLaRoe and MLMs. Have a nice day.

Why would the amount of time he’s invested in defending his wife and her LuLaRoe investment be disturbing? I would defend my husband, whether I felt he was correct or not. I’m not trying to criticize your article at all, but you are SUPPOSED to defend your spouse. Would you rather everyone just agree with you and not defend their loved ones? By the way, why did you put quotations around the word, wife? Also, I don’t think he was being overly protective at all. I understand why you think he would be biased, but him responding that way is in no way disturbing. I am NOT a consultant, but I do believe in strong marriages and he was not of line.

Because the business is about “women” and “sisterhood”…I put quotations around “wife” because I get lots of “husband” comments on MLM and direct sales posts, which are almost always sourced to marketing and PR firms hired by the parent company. Maybe I should be more transparent with my readers about that. I didn’t realize that wasn’t understood – a lot of these pro-LLR comments are from paid professionals. Which makes the whole company even more upsetting – they’ll pay people to mislead others but not to sell their product.

Just a little note about ‘Those that can, do and those that can’t, teach”. 1. I AM a teacher. I CAN DO every single thing I teach and much more than I teach. I have 2 degrees to prove that. I also have years of successful, smarter, wiser, and more fulfilled students to prove it. 2. As a teacher, I help to shape, inform, influence, and build the future leaders of the world by leading in example. 3. You use the term “teach” as a derogatory sentiment. You obviously learned something or you would not have acted as though this blog is “teaching” anything. To “teach” is magnificent. 4. I am sorry for your teachers that you hold such a low opinion of their intelligence, work ethic and skill set. You have failed them. 5. Every single piece of Lularoe clothing I have seen has been made in China or Vietnam. I have yet to behold an American made piece of Lularoe product. 6. Those who do not understand or cannot do it themselves find ways to criticize, attack, or bully others instead of ignoring the information presented. You are allowed to disagree with someone else’s analysis or recommendations. This in no way makes you or them any more inferior to each other.

Do you not realize that you get more than $18 for each piece of clothing? You get the $18 profit plus the initial cost of the of the piece. Hello? Is this the kind of math they teach in grad school? I can’t believe this. If a consultant sells their entire inventory and never ordered a thing they would double their money.

That’s false. The math in my post is accurate, and I clearly explain how LuLaRoe’s “math” is intended to deliberately confuse prospective consultants. You will not double your money. Please read the article. Thanks.

Wow. You have no clue how to do math. It’s unfortunate that you are attempting to steer people from a career that could change their life. While it’s true that not every consultant will thrive and make plenty of money, that’s not because of the company they are selling for. This company has made SURE their consultants can make a fantastic living in this business. The reason they aren’t making money is because they aren’t willing to put in the time and effort and money at the beginning, to succeed. It is the with every other small business there is. Do you realize that almost every business purchases their products from another business and then sells them at retail? Of course we aren’t LuLaRoe employees, we’re our own businesses, and we have policies and procedures we follow so that the company is cohesive. Just like a franchise of so many large companies. So explain how this isn’t a legitimate business? Let me break something down, in easy to understand numbers. Say you pay $5500 to LuLaRoe initially, you receive product, you sell product. To keep it simple let’s say you sell it all. For selling it you get $11000 from your customers. You then take half of that and then buy the same $5500. You are back to the same amount of pieces in your inventory, plus have $5500 in your pocket!! I am a LLR consultant, new, and am making plenty of money. Enough to have doubled my inventory. Explain how I could POSSIBLY buy another $5500 in product, in addition to what I already had, without having made any money? Also, no consultant can stop selling and just recruit, they have a minimum amount to sell that is still quite high, if they want to receive a bonus. It only slightly lessens so they can have time to train their downline. The woman who runs girls on fire doesn’t sell on the website, because we are home based businesses, not online retailers. You cannot sell on a website like that. SHE wants to share this opportunity, to change lives. Not encourage people to settle. She sells plenty of inventory elsewhere. It’s funny that the only comments to make it to the wall are in your favor. It’s sad really. I feel terrible for all the families that could have bettered their situation, but changed their minds, because of someone who doesn’t have proper or intelligent information.

I walmart buys 1000 worth of products and then sales for total revenue of 3000, then you would subtract the initial investment of 1000 and end up with $2000 profit… I don’t understand how you do not get this????

That’s actually not how it works at all. You’re forgetting operating costs which include wages, expenses, real estate, taxes, etc. etc. And I realize LLR tries to sell the fact that you just need one person and that’s why you get to earn so much, negative. nope. not true.

Sara- your numbers are not taking into account paying yourself back. If you invest 5500$ and sell out, then you have made 11000$ like you say. If you then take 5500$ of that and buy new inventory, you don’t have 5500$ profit, which is where you’re wrong- you’ve broken even because you put out that 5500$ to start- you were only able to pay yourself back.

So now, you’ve taken 100$ of your actual profit and…what? Marketing efforts, gas to/from parties, time invested, *shipping costs;* if you use all 5500$ of your profit to buy new merchandise, you’re actually in the red because of the time and postage put in.

Mrs. Bottlesoup, you sound like an arrogant prick. Who would even want to believe anything you say? The way you respond to people is absurd. Why don’t you get a life. No one needs you, to tell them how to spend their money. I’m not a consultant nor want to be, but really? Have some respect…

No. you invest $5,500. You need to make back that investment. You gross $11,000, but you have to pay back the $5,500 you invested initially, then invest your net profit of $5,500 back into more inventory. You have broken even, essentially assuming that there were absolutely zero other costs in selling, which, let’s be real, isn’t the truth. So next month, you sell the $5,500 in product for a gross income of $11,000 because you got ALL unicorns and sold the F out of your product! (Because that’s realistic.) You now have $11,000 and back goes $5,500 into inventory. You have $5,500 left. But the cost of running that business isn’t $0. You need to consider the fact that consultants often keep their favorite items, they offer a pair of leggings to host a party, you need to buy totes, hangers, racks, business cards, frequent buyer cards, gas for your car and shipping for all your products as well as booth fees for any events. (I know that line, “a great way to drum up new business is to do an event!” ????)You just dwindled that $5,500 down to less than $2,000 and you worked your butt off for 50+ hours a week sacrificing time with your family, attending your daughters violin recital, your sons baseball game, your husbands birthday… for what? For $2,000!? Was it worth it? Mrs. Bottlesoup is correct; the business model of LuLaRoe, and any MLM, is not sustainable. It simply isn’t. At least not for the average consultant. Let’s not even get into the fact that there is absolutely NO benefits package. Health insurance, retirement, dental, vision… forget about it! Disclaimer; I do love LuLaRoe clothes and have been approached countless times about joining, but it just simply doesn’t add up.

Of course she does. She can’t stand being wrong. Pretty simple. You pay for something that is $5, and sell it for $10. You are clearly making money. Bottlesoup, here’s an idea. Why don’t you actually get a real job and quit telling people how to spend their own money.

Once again, I understand the math needs to be updated. I have a real job – which why I’m not spending my entire life moderating these comments. By the way, you’ve left MANY, so pot meet kettle. Have a good one. #sorrynotsorry

Exactly. If the consultants were truly profiting or making a career out of this, there would be no upfront costs. The fact is, LuLaRoe pretends like it is a business opportunity, but you do not have the freedom of being a business owner. There are strict rules and regulations that prevent “consultants” from profiting, and you are limited severely by this. It’s sad that people can’t see this, but hopefully through education I will be able to prevent people from making the mistake of joining companies like these. I’m pro-business and pro-women finding self sufficient hustles. Sadly, this is not it.

Explain to me what legitimate business doesn’t require an upfront cost? If I wanted to open a McDonald’s, do you think they will just give me inventory for free and then say “pay me later”? Also, you keep saying my math is correct but when people give actual numbers you can’t defend it.

No, but what you bring up is a good point. If you open a McDonald’s, that’s a franchise. You are limited in your potential and how much you can grow. Similar to LLR. If you open your own business, you can control everything about that business. Not necessarily true with a franchise, and absolutely not true with direct sales and MLMs.

Hi there! I did not understand you math. I’m confused. Can you please walk me through step by step of your calculations.I’m thinking of becoming a consultant so if you can explain me I would really appreciate!

This article is undoubtedly negatively impacting the world due to its infidelity. The math is simple. If a person buys any arbitrary item for $5,000 then proceeds to sell that same arbitrary item for $10,000 the result is a $5,000 profit. Wow, not very tough to figure that one out. Haha, if you start with $5k and finish with $10k that means you’re winning. No high level math needed here.

False. The $6,000 you invest to onboard is what buys all of your inventory. Then you mark up each item and profit from the mark up. So if you markup an item by $18 dollars then you make $18 dollars off of that item. It’s what every business does.

Because they are purchasing inventory from LuLaRoe. You aren’t just giving them money to become a consultant, you are buying product. Same as if you are opening your own store front, you have to buy merchandise to sell.

They have to pay that amount because it is a small business so imagine that you want to be a consultant and your going to start selling. This is not mary kay or avon where customers order from a magazine it doesnt work that way so you have to fill your “shop” with merchandise that you pay wholesale for. Well you could buy a couple items and try to sell that way but as customers we like options lots of options! So the owner decided that 300ish items is the best set up for new consultants youll have a few different styles and youll have options in ALL sizes and are likely to sell more just because of that. The start up sounds like a lot but when you really consider that its a business starting up any other brick and mortar business would cost ridiculously more. I personally love LLR i love the clothing and the fact that they only make so many items in each print it makes it unique and thats huge.

That’s an interesting theory, that they HAVE to pay that amount because they’re starting a small business, but wouldn’t you think a company that wants to help women would make it a little easier for them to start a small business? I mean, even the federal government and state governments give out small business grants – free money you don’t have to pay back in order to help you start a small business.

Oh and by the way of that $5500-6000 to startup LLR is not fees or anything like that. That money is solely the cost of the clothing. I am in no way related to LLR I just did a bunch of research when I started shopping through consultants.

BWAHAHAHAHA!!! OMG I’m dying at how you’re sticking to your guns on your calculations! Here’s the way you’re doing your “math”: $12,500 in sales – $5,500 initial investment = $7,000 profit now subtract another $5,500 cost of inventory = $1,500 now subtract $5,500 again for cost of goods sold = -$4,000 now subtract the same $5,500 for cost of merchandise = -$9,500…so actually no you’re wrong, selling all your initial inventory will result in a loss of $9,500 HAHAHAHAHAHA!!! Even an 10 year old can do better math!

Thank you so much for this article. I was temporarily blinded by the glitter and fairy dust and the floral prints and was actually thinking about buying in. This is completely against my logical nature but I hadn’t the time or info to weigh it all out.

I am not a Lularoe consultant and have many of the same thoughts on the potential profitability of the business model but I would like to revisit your calculations. Let’s imagine a hypothetical situation and say that you buy 381 pieces for $5500. That averages $14.44/piece. You would sell each item for 14.44 (base cost) plus $18 profit for an average of $32.44 per piece. 381 x 32.44 would give you a gross profit of 12359.64. Subtract your initial investment of $5500 and your net profit would be $6859.64. That, of course is a perfect world scenario. We know that they have patterns that don’t sell, giveaways, reduced price sales, travel expenses, postage and promotional materials to account for. They definitely do not double their money and there is a lot of time and effort involved. I enjoyed to realistic approach to Lularoe and it definitely helped to clear my head but I just wanted to give you my take on the sales numbers.

My SIL finally on-boarded a few weeks ago. I am trying to be supportive of her endeavor to make a go of it while cringing internally at how easily she fell for the sales pitch – hook, line, and sinker. (I keep my mouth shut because I’m trying to keep the family peace and because she’s an educated grown-up who can make her own decisions.)

Anyway, I wanted to add one additional point to your post here. Despite the work you and others like you have done outlining how these MLMs work, LLR apparently saw a HUGE increase in onboarding requests this past winter/spring. The large influx slowed on-boarding to the point where ‘consultants’ were waiting in the queue for upwards of three months. Now, at least six months after that glitch, LLR STILL hasn’t solved their supply-side issues, even for existing ‘consultants.’ For instance, my SIL placed a request for new inventory about two weeks after she received her initial stock. It took over three weeks for LLR to even pull her order (I don’t know if it’s shipped from the warehouse yet!), and her order wasn’t massive in the least. In fact, I think it was the minimum 33(!!!) pieces required to place an order. (Yes, there is a minimum order requirement, in addition to sales quotas and all the other MLM nonsense.)

My point being, for five weeks, there has been no infusion of new inventory beyond what she could trade with other consultants to get. For a company saying it’s empowering SAHMs to make a living selling fast fashion, this kind of supply-side delay is absolutely killing any chance most new ‘consultants’ have of trying to establish themselves. And that’s what pisses me off more than LLR’s inaccurate math and clique-ish mindset. Women who are being told to grow their ‘business’ through hard work and drive and initiative are being handicapped by the corporate office before they even have a chance to generate any turnover in their inventory, so they do not stand a chance of trying to recoup or minimize their initial investment, let alone.

(That being said, I do like the clothes I’ve purchased from her. They are usually some form of polyester blend, it’s true, but almost all affordable women’s clothes – especially plus-sized styles – are today. For the clothing that I have, the retail price and quality is similar to GAP, IMO. And yes, my SIL is her own best customer. No, I’m not a ‘consultant’ nor do I wish to be one.)

Thank you for sharing your side. It’s true they’re out of supply and people are waiting now. It should signal the bubble in the market, but people are so desperate to believe this is the real deal way to solve their financial worries. This is the worst time to invest in something like this. It’s always bad, but the bubble is about to burst.

I’ve read your whole post and the comments from people, along with your reply. I’m sorry, but those who have said your math is wrong are correct.

Before you comment, please note, I’m a former buyer in retail. I’ve worked for the following companies: Frederick’s of Hollywood, Motherhood Maternity, L’Occitane, Hot Topic (and actually designed and opened the first Torrid stores) and others. I also have a sister who is selling LuLaRoe and she has honestly shared with me what the costs were for her to get started, the actual markup on inventory, and so on, as she wanted me to let her know if this was a mistake. It’s not if someone is willing to work the business.

But back to the math debate. Let’s use your inventory number for the kit of 381 pieces and the markup of $18 per item. That means you have a net profit of (381 x 18 =) $6,858. If the 381 piece kit investment you paid was $5,500 (as you stated), then you need to add that to the $6,858 net profit to get your gross profit of $12,358, and that is if the $5,500 is only inventory for selling and nothing else like supplies. This isn’t the number you say LuLaRoe gives, but it is close to it ($12,500).

Let’s run the numbers, but we need to get the right numbers.

If the kit was $5,500 for 381 items, this means the average cost is ($5,500/381 =) $14.44 (don’t know what number you used as you don’t show us). Now if you add the $18 markup you are using to the average cost per item ($14.44 + $18 =) $32.44 is your average retail per item (not sure how you got a higher number of $32.80, must be the unknown average cost amount you’re using).

Now, if I was going to pay myself back in a month, the chart says I’d have to sell 70 pieces a week. Let’s do the math using the numbers I have above with that 70 pieces a week sales number.

Average cost per item $14.44 Markup amount $18 (which is a 55 percent markup) Average retail per item $32.44

If someone did this every month, they would make $46,581.60 gross per year. (895.80 x 52)

Why your numbers are wrong compared to mine. You didn’t add the average net cost per item to the average markup per item to get your average retail per item. Instead, you just took the average profit per item times number of items sold to get gross profit. (280 items X $18 = $5,040) If you noticed, I got the same net profit, but I didn’t subtract that number from the total investment number ($5,500) as part of this number was already paid back through Gross Profit of Goods Sold when I subtracted the Cost of Goods Sold from my Gross Profit of Goods Sold, which then gives you the Net Profit before remaining investment repayment.

This is Retail Buyers Math 101 by the way.

Now the net profit I show will still have to go back into buying new inventory so a consultant still would not be in the black if sitting on the remaining 101 pieces. But their business has paid them back and is now paying for itself. This of course isn’t factoring in supplies, shipping, and so on, so honestly, they’re still in the red at this point. That I agree with. One thing to note is most women selling LuLaRoe charge a shipping fee so this doesn’t come out of their profit, unless they offer free shipping or shipping is more than what they billed their customer.

Next, I’m not sure where you’re getting the $2 profit per item amount. Must be the average cost per item you’re using is $16, but you can clearly see that isn’t correct when looking at my formulas above. It’s $14.44 so it’s more like ($18 – $14.44 = )$3.56 profit per item, which is a 55 percent markup (standard markup is 50 percent). This is low compared to what all those wonderful retail stores in mall are marking up their items to. Trust me, I know since I used to do this for a living like I said earlier and if you really think about it, how else would those places be able to afford doing 50 percent to 75 percent sales on the holiday weekends. Because they use a higher markup than the standard markup of 50 percent.

Let’s use the leggings for a second. Most of the LuLaRoe groups I’ve seen are selling these at $25 each and not $20. I know the cost is $15 as my sister sells LuLaRoe and told me. So this is a $10 profit when sold at the $25 retail price point. That’s a 60 percent markup and a very normal markup at that. Most retail stores markup 65 to 75 percent if not higher. And don’t get me started on jewelry markups. It would scare you.

Lastly, let’s go back to the other costs not being used in this break down (shipping, supplies, marketing). Those will cut into net profit, of course. But the business model is sound as long as people want to keep buying what is being offer. Even in a brick and mortar store as a buyer I couldn’t always get right what would and won’t sell.

With LuLaRoe, you don’t have the option to buy more of the style, fabric, pattern that is selling and this is a problem. But you can work around that in clever ways to move the inventory not selling, and with the way the product is, people will keep coming back to see what is new. You also have a since of urgency because those selling LuLaRoe don’t have a size run in each print, fabric and style.

I don’t see this as a scam, but I do see it as a real retail business you have to work at and be willing to put the hours in to pay off. I don’t think it is for everyone and not everyone will be successful because retail is hard and marketing is a big part of it, along with selling.

I want to state once more (as I can see you commenting back I must sell LuLaRoe) I don’t sell nor do I intend to sell LuLaRoe. You can even look me up via Google to see this. I’m a former fashion buyer. I’m an author and partner at World of Ink Network now. My sister sales LuLaRoe and I looked into this for her. For me, I just like the clothes. It did take time to get me into even try an item as I tend to be very standoffish when it comes to clothing with my retail background and product knowledge.

I hope this helps give those thinking about selling LuLaRoe a bit more information.

I appreciate your breakdown – I am very tired at the moment but did not want to wait to approve your comment and let you know I appreciated it. I posted an update to my math here. Is it still wrong or is it lining up with what you provided?

I came upon your post when I was trying to find evidence to show my step mother that signing up to be a Lularoe consultant is a TERRIBLE idea!

However your math is actually incorrect. You are confusing profit and revenue. Revenue is the total value of the end transaction, think of it as the retail price or the price you sell a good for. Profit is net income after your costs or expenses are paid. So profit = revenue – cost.

You state that each piece has an average PROFIT of $18: “This assumes that each piece will net an average profit of $18”. Remember that profit = revenue – expenses, so when you say ‘profit is $18’ this implies the net income on a good AFTER all expenses are paid.

You later make the following claims, and THIS IS WHERE YOUR MISTAKE IS: “You invested $5,500 in your starter kit/inventory. You earned $5,040 from selling 280 pieces of LuLaRoe clothing. $5,500 – $5,040 = $460 shy of your initial investment” ……. and then later you say “If you sell 101 more items at an average of $18 profit per item, you will earn $1,818. Oh, wait, you need to subtract that -$460.”

$18 is the PROFIT – NOT the REVENUE. You state that the items NET $18 per piece. Assuming the $15 cost, $18 markup you have listed, the actual revenue value of each unit is $33.

So say in the first month someone manages to sell 280 pieces. 280 pieces multiplied by the SALE price of $33 = $9,240 in total revenue. You must subtract the initial investment from the revenue amount, not profit. (Because again, Profit = Revenue – Expenses.) So revenue on 280 pieces is $9,240, subtract the initial investment of $5,500, and you already have a net profit of $3,740. And THEN you still have 101 pieces to sell.

Your math only works if the revenue is $18 per unit, which would make the NET PROFIT $3 per unit.

Math semantics aside this company is a total pyramid scheme and it is highly HIGHLY unlikely for most ‘consultants’ to have such high sales.

Let me be quite clear: LuLa Girls on FIRE is a website dedicated to recruiting new LuLaRoe Fashion Consultants and occasionally selling some product. Don’t believe me? Hop on over to the website and tell me which is easier: buying a pair of LuLaRoe leggings or getting tons of info geared to becoming a consultant? Yeah. You can’t even buy any LuLaRoe products from this LuLaRoe Fashion Consultant on her website.

Just to clarify you need to realize before posting statements like this that LuLaRoe does not allow consultants to sell product through an online store. Have a happy Tuesday!!

So you said that you net a profit of $18 per item sold in your example, Right? So If you sell 280 pieces you net $5,040 that is after all expenses have been paid i.e the wholesale cost per item.

just to clarify the definition of net is: Often referred to as the bottom line, net profit is calculated by subtracting a company’s total expenses from total revenue, thus showing what the company has earned (or lost) in a given period of time.

So in your example you are really selling each item at lets say $40 to the customer and of the $40 sale per item you actual net $18 and the other $22 from that sell is covering the cost of the initial investment.

I think this is were everyone was getting hung up on with the math. You’re simply subtracting the net (5,040) from your investment of 5,500. Your math shows it as though someone is selling their product at wholesale without marking it up to retail cost.

Its simple I buy and item at wholesale for $20 I sale that item at retail for $40 I gross $40 and of that net $20

So the customer paid for my initial $20 wholesale investment and on top of that gave me an extra $20 in profit.

I am trying to follow the math and am having difficulties understanding the numbers. I believe you are only using net profit to calculate the break even point. You state the net average profit is $18 per item. This does not include the cost of goods sold (COGS), as it was already subtracted out. Taking 381 items with an average profit of 18 per item, we have a net profit of $6,858 (381×18). Generally speaking, you take Total sales and subtract COGS, this gives gross profit. Then take gross profit and subtract operating expenses, interest expenses, taxes, credit card fees, etc.. and that will give Net Profit. Granted it does not appear that Lularoe takes any operating expenses into consideration when using the $18 net profit per item. On 381 items, rough math would estimate total sales “without tax” of $12,358 (5,500+6,858). Of that $12,358, $5,500 was COGS, so you are left with $6,858 in gross profit. Again this does not take into consideration of other operating expense as previously mentioned, therefore its technically gross profit instead of net profit.

After looking into this company, I believe the sales tax issue is a huge concern. From what I’ve read and heard from consultants, a consultant is required to collect sales tax on every item sold, regardless of the customer location. For example, a consulate based in Florida is required to collect sales take from an online order where the buyer lives in New York. Lularoe has their own payment systems which a consultant is required to use. Lularoe actually collects the sales tax, puts it in a trust, and distributes the sales tax to the state accordingly. Furthermore, its not clear which state Lularoe is putting the sales tax towards, New York, where the customer lives or Florida, where the consultant is. Lularoe only has a physical presence in Utah, therefore, they are only required to collect sales tax in Utah. Unless the consultant has a Tax ID number, Lularoe should be charging Utah consultants sales tax on all orders as well.

I have read that customers have started disputing with their credit card companies with paying online sales tax when it was not suppose to be charged. I am not certain how Lularoe pays each state the sales tax, if its under Lularoe or if they are actually filing the sales tax under the consultants name. If you have an LLC, you are required for the sales tax to be filed under the LLC name. You are also required to keep all records of sales tax paid incase of an audit. Generally speaking, sales tax is paid quarterly. Multi-million dollar class action lawsuits have been won in the past with corporations wrongfully collecting sales tax, even based upon a 10 cent wrongful overcharge in sales tax. Since Lularoe consultants are not employees of Lularoe and the consultants are either self employed or their own corporation/company, does the burden for wrongfully collecting sales tax fall upon Lularoe or the consultants? According to Lularoe, the burden of collecting sales tax falls sole upon the consultant….

I believe you are taking the net profit and subtracting it from the investment amount. If you look at the chart you need to subtract the initial investment from the gross so if I spend 5,500 and in 4 months made 9,240 in gross sales then I would have paid my initial investment and netted $3,740 in profits. Do the 60/40 split 60 back in and 40 in the bank and you start to build inventory on top of still having from the initial investment 101 pieces to sell. That a real critical error in your math! When someone buys an item what ever it be they are paying for the cost you have in it and a markup that you keep. Simple business.

I’m sorry but I have to agree with everyone calling out your math. You are taking the net and subtracting it from the investment. The net is what you keep. You keep using $18 (net) but what about the gross? In the example you are using if the profit is $18 then the gross is around $34 so if I sell 280 pieces at $34 that = 9520 subtract the initial investment 5,500 from the 9520 and you get the net or what you get to keep. $4,020. I honestly hope this is an oversight on your part and not that you’re trying to mislead people and have some kind of agenda against this company.

The math is incorrect. 280 pieces at 18 profit would give you 5040. But the sell price is an average of 28$ per piece. Which would be 7840 that would pay your initial investment and give you 2340 in profit. You are writing on the assumption that you will sell at 18 $ profit then you need to include the full price.

The math was wrong because I deducted the investment twice. This comment is not directly at you, per se, but now that I’ve fixed my error it’s honestly so funny how many people could point out it was wrong but most people misidentified the error which is why it took me forever to sit down and figure it out.

Lmao, I’m really that the middle school and high school teachers (doubt you ever went to college) have failed you. Either that, or you don’t understand how this works.

6k start up is for the pieces of clothing you are buying, you do not have to pay the base price of clothing back to the company. You do not keep “only” the profits you make. You sell a $40 item, you keep the $40. Therefore the dumb argument that you recoup your 6k investment ONLY from the profits is , well… dumb. The fact that you keep screaming “my math is right!” doesn’t make it so.

The fact that you still don’t understand how wrong your math is, baffles me. In before you respond to this with “Well between fifteen toddlers, a full time minimum wage job and the blog, I can’t be bothered to fact check my math!”

And no, I’m not a consultant, thanks. Just happened on this post while looking into LLR.

Oh, and I forgot to mention, there are no “undercuts”. There are strict rules in place which prohibit you from going below a certain price. And pretty heavy negatives / punishments (especially if you sell through facebook groups) for doing so.

Just want to let you know your going to have to do some back pedaling on your comments! You Math doesn’t include the gross sales! So to take your example if each piece as you state is retail value of 32.80. And I spend my 5,500 in inventory and I then sale 280 pieces in a month. Lets do the math!

32.80 * 280 = 9184 Gross 9184 – 5500 = 3684 Net

And according to you I still have 101 pieces in inventory with 3,684 dollars in the bank.

The problem with my math was that I deducted the investment twice. I updated here. The reason I was so stubborn is because of comments like this, which – while you are correct that there was an error – incorrectly identified where the error was, thus I had a hard time understanding where the comments were coming from until I sat down and reworked the entire problem. Thank you, though. I know your intention was to help me bring out the truth. Appreciated.

The $18 per piece that you’re using to come up with $5,040 is the markup/profit, not the retail value. The retail value (i.e, his/her sales) from those 280 pieces would be more like $10,000. In your example, this person would be just shy of doubling their investment, not breaking even.

Another MLM concept blazing a trail of financial ruin and destroyed relationships. I learned my lesson over a decade ago with Arbonne. I got out before I spent too much money, and before I lost any friends. In fact, when I was quitting and told my upline that all my friends said no, she asked, “No, like not right now, or no, like never speak to me again?” That nailed the coffin shut. What people fail to understand in the hazy fog of fuzzy compensation math, exploring their WHY, and daydreaming about “free” cars and vacations (taxed as income), is that MLM is SALES, and not every personality type is suited for sales. It’s not just sales though; it’s cutthroat, fast-talking, low information, con job sales. This type of sales requires a special anti-social, possibly disordered, personality. Most of us who do not have a sales personality start out very excited because we’ve been conned by a morally bankrupt rabid recruiter, and we might see initial support from friends and family. Then we go and do a home party at our bff’s house, we start spouting all kinds of “knowledge” of a product (or entire industry) we knew exactly nothing about a month ago, our bff gives us a funny look because she knows we don’t know what we’re talking about, she buys an item or two because she loves us, no one at the party is interested in the “opportunity” or becoming a hostess, and we immediately begin to sink. We care what people think of us, we care when they say no, we don’t understand why our friends don’t see what we see, we’re nervous and offended by the discerning questions that may have been asked at the party that we couldn’t answer, and we barely made $20 on that party we spent $150 preparing. When the high subsides, those of us with a conscience typically feel the embarrassment and shame that we got taken for a ride, we quickly realize that our upline was not really a new friend, and we hopefully learn our lesson about MLM in general.

Sometimes it takes some people a few rounds of businesses to figure it out, usually because they are truly so desperate for a type of fulfillment that the recruiter guarantees she has. She doesn’t, by the way. She is lying about the business, and she is lying about her own success. She will tell you flat out in training that she’s lying to you (fake it till you make it), and you still believe her! That’s because she’s a personality type that can lie and manipulate, and since you are not, you naturally believe she is being truthful. It’s really a fascinating microcosm of human behavior, this MLM mess. I’d love to study it from a psychological perspective. But alas, psychology is merely a hobby, and I have a job and kids. Now I just search for scam reveals about what the new craze is (how I found you), attend the parties that don’t annoy me, and gently warn my friends who tell me they are about to join the business.

I love your encouragement for people who want to work from home to learn a skill. I always knew I wanted to work from home, but it took a long time to realize that I couldn’t do this from an entrepreneurial perspective. It’s just not my personality. Instead, I worked out in the world and found a career I love that was as close to home as possible. A less than 2 mile commute doing work I enjoyed was my runner up scenario. Two kiddos later, daycare was unaffordable, and I simply didn’t want to be away from them anymore. Knowing that my industry works well in a telecommuting environment, I took the risk and asked to reduce to part time hours, working entirely from home. They said yes, and here I am. The income hit wasn’t as bad as I thought it might be, though I do now find myself looking for freelance work to offset swim lessons and such. But the reality is that if you want to work from home, your best bet is to find a way to do it while actually employed with a company that pays you a paycheck. Telecommuting is on the rise; step out and start networking. At the very least, you may find that you can work a flexible or part home/part office schedule.

At least LLR is just clothes. I hope you tackle the essential oil disaster next. Peddling oil from a sell sheet with zero background in science, medicine, horticulture, or human biology. That one is going to kill someone, and the wrongful death suit will be on the poor consultant who had no idea that she had no idea what she was doing.

You hit the nail on the head – that was my mistake. I posted an update here. However, since this update I have received additional information about LLR – apparently there is a mandate to re-order inventory to stay active. I’ll find out more information about that.

Alright… Your article was very written and i actully read through it all as well as all the comments. I stumbled on this article helping a friend look for info on LLR. If i would have seen this article before my wife decided to be come a LLR consultant i would not have let her do it. She started about 5 months ago and i was not sure it was going to work when i saw all the money flying off the shelves. After her first two parties she was already ordering more inventory. Thus spending more money. The amount of money she has spent on inventory and supplies almost made my head pop off. Putting that aside i supported my wife as i know this is something that she wanted to try. She wanted something for her. So i gave her 100% of my support. Well after a few months the Credit Card is finally paid off and she is contributing to the monthly bills and expenses. Trust me… at this point it has NOT been life changing but this has certinaly improved our lives and her sales keep growing. She is now building her team so we can expect extra income from that. I am glad that my wife wanted to do something for her and i am especailly glad that she is now offically making money. Its not a get rich quick scheme as she works her but off. Since she has paid off her credit card she should be making a profit of around $1,500 – $2,000 this month (before tax). I was not sure about this venture but at this point i am very happy that we both decided to do it. In some ways it has broughten our family and our relationship closer. So I suggest anyone looking to become a consultant read your article but they should also realize that this LLR concept does not work for everyone. You simple get out what you put in.

Love, love, love this blog post. I am a small business consultant and one of my friends got in touch because his wife has been pitched the LuLaRoe “opportunity” and he wanted some tools to help him figure out if the “investment” she wanted to make into the “business” ($5,000 from their not-robust savings account) would be worth it. I sent him information on calculating break-even cost and cash flow, but I also sent him this post, and told him the following:

– Even without the expenses of a physical storefront, all pieces should be sold at 50% gross profit margin or above if the business is to be profitable AND pay back expenses. That means NO DISCOUNTING. And there are so many consultants out there for LuLaRoe that it is hard to sell without discounting.

– Sales price – cost of goods sold = gross profit, NOT net profit. Net profit is what you can use to reinvest in the business, or pay yourself. After you subtract the cost of the item sold from the item’s sales price, you then have to subtract the following expenses: transportation, packaging/mailing costs, taxes where applicable, marketing materials, etc. This does not include payment for hours spent working the business. Once a consultant does pay herself something, THEN she has federal (and possibly state) self-employment taxes due on whatever amount that was taken as compensation. With all MLMs, once NET profit is calculated, most people are dismayed to figure out that if they can pay themselves at all, it might be $5-7 an hour – less than most minimum wage jobs. And then they have to pay taxes from that! Most MLMs like LuLaRoe greatly de-emphasize expense accounting and encourage consultants to think of every penny of gross profit as “profit” or “compensation.” Nothing could be further from the truth. And, most MLMs encourage plugging whatever “profit” is realized “back into the business,” i.e., buying more inventory from the company. I have met MLMers who have not paid themselves any compensation in years.

– The biggest issue about LuLaRoe to me is that you cannot pick and choose what you want to buy to sell to YOUR OWN CUSTOMERS. SAY WHAT??? A good businessperson knows her customers and knows what they want, and what will sell. If what customers want is ABC Legging, the businessperson should be able to order $5,000-worth of ABC Leggings, and not order anything else if she chooses. Not get a shipment of “stuff” that might sell, or might not. Because any retail store owner can tell you, sometimes things just don’t sell, even when a buyer does know their customer, and makes what should be good choices. So remember my first point (and Mrs. Bottlesoup’s point) about how a certain amount of gross profit must be realized on every item sold for the business to be financially successful? If you have inventory that is not selling, after a certain point, you have two choices: 1. discount it until it sells (hopefully), or 2. dump the inventory, realizing no income from sales, and account for it as “sunk cost.” The margins on LuLaRoe clothing are not good enough that consultants can afford to sink money into inventory that never sells. If I am selling something, I want to be able to order exactly what I want to sell, what I think will sell, and what my customers want. And if I can’t do that, I should be able to send the unsold inventory back to the company for at least a percentage refund of what I paid.

All MLMs that require up-front inventory investment are the same: the real customers of the company are the consultants buying the products in bulk. NOT the end user. The companies generally know and care very little about who actually uses the clothes, makeup, skincare, nail products, etc. produced by the company. Because their real customers are the “independent consultants” who attempt to sell the products. Mrs. Bottlesoup is right – MLMs are NOT real entrepreneurship. I have worked with over 300 entrepreneurs in my career. Some succeed, some fail. But I have never seen one person succeed long-term with an MLM, unless they were recruiting other sellers, and not just selling the products. If you love fashion, start an online boutique, get an Instagram, and start sending out press releases. You’ll lose less money from that over the long run.

Thanks, Amy. Let me know if you’re interested in partnering on future analysis of direct sales and MLM companies. I really like the way you think and the way you presented this information. I feel like my readers would, too. Email me at bottlesoupblog@gmail.com

Actually, your math IS wrong. I’m not a consultant but I AM an accountant. You say that after selling 381 pieces, you earned $5040. That’s WRONG. You actually would have earned $12,573 (381 pieces at $33/piece average). You’re only accounting for the $18 profit when you subtract it from the investment when you should be accounting for the whole sales price.

I see that in the beginning you’re figuring you’ll only sell 280 pieces but you state that would earn you $5,040 but 280 pieces actually would earn you $9,240 (remember, revenue = quantity x SALES PRICE, not quantity x profit) therefore you would have made back your initial investment in the first month AND still have $181 items to sell.

So you take your first month earnings of $9,240 that you got for selling 280 items at $33/piece and you have a month 1 profit of $5,200 (That’s $9240 revenue – 4040 expenses bc each piece costs you $14.43 wholesale from LLR).

Then you sell your remaining 101 items and gross $3,333 leaving you with a profit of approx $1,876 for the second month (3333 revenue – 1457 expenses).

So for two months you have total REVENUES of 12,573, total EXPENSES of 5497 and total PROFITS of of $7,076.

I have heard a small percentage of gross sales are always piped up the line to sponsors and coaches from the fashion consultants. Do you know this to be the case? In addition is it the consultants paying those above them directly? If so, then definitely pyramid…

I guess I am an exception to the rule and I should consider myself lucky. I took my monthly sales number, put 50% into reinvesting, 25% aside for taxes, and 25% toward paying back my investment. Paid it off in 9 weeks. I work approximately 25 hours/week though. Now that I’m officially in the black, I’m making about 2250/month. (I still reinvest close to 50% and now put aside 30% for taxes; my left over is between 2000-2500/month). Before I was bringing in nothing as a stay-at-home mom, so this is definitely an improvement, in my case. Not for everybody, but I’m loving it. I have a lot of fun with it, have my own in-home boutique, do mostly online sales, and do a few pop-up parties a month. I really enjoy it, personally, but you definitely have to be a good salesperson and put in the effort to get your name out there. Also, it helps to get lucky with the more sought-after prints, although I find that the online clients and the in-person clients are completely different. On-liners are the ones looking for the “unicorns,” while pop-up parties sell a lot of solid leggings, etc. Also, where are you finding the 2/$40 deal for leggings? They cost $25/pair and it is prohibited to publicly advertise them at any other prices. Anyway, I do think the biggest misconception is that it will be an easy side gig and the money will roll in. You need to put in the time and effort, and you will make an ok salary. I was a freelance writer before this, which paid WAY worse, so this is an upgrade for me and I’m having a blast.

I’m sorry but your numbers are simply not correct. You are using the term “Profit” incorrectly in your calculations. You are using the term as if it were revenue, where in reality profit is revenue minus cost. Here is your example: “But let’s be generous and say you unload all your stuff for an average $18 profit per piece. Let’s say you earn that $1,358 and business is booming” so I’m assuming you took the 381 pieces times $18 which equals $6858 and then subtracted the original $5,500 which gave you your $1358. This is not the proper way to calculate this, as the $18 dollar profit already accounts for the original investment per piece. Here is the proper calculation: On average the cost per item is $5,500 divided by 381 which equals $14.44, the average selling price is therefore $14.44 plus $18.00 which equals $32.44. So the total revenue is $32.44 times 381 which equals $12,360. So off of this first batch you have made $12,360 minus the $5,500 original investment which equals $6860. I have issues with this companies business practices and sustainability, but you make it out to be a lot worse than it actually is.

I am not a consultant but am interested in it so I’m doing some research on the business model. I consider myself reasonably intelligent- I do medical dosimetry for a living (consists of physics and math) but I am truly confused by your math. I’m not here to critique but to genuinely educate myself and try to understand the pros and cons of this business.

Per the article: “Let’s say you want to pay off your LuLaRoe investment in 1 month. According to the chart, you need to sell an average of 70 items per week, or an average of 10 pieces per day. If you meet this sales goal, 70 * 4 weeks in a month = 280 pieces sold. Your kit contained 381 pieces. You’ll have 101 pieces left to sell, and you’ll still be in the hole -$460 for the first month. IF you’re scratching your head, let’s back up: you invested $5,500 in your starter kit/inventory. You earned $5,040 from selling 280 pieces of LuLaRoe clothing. $5,500 – $5,040 = $460 shy of your initial investment.

But that’s ok because you still have 101 pieces of inventory left to sell, right?

Sure. If you sell 101 more items at an average of $18 profit per item, you will earn $1,818. Oh, wait, you need to subtract that -$460.”

My questions is: Why are you subtracting your initial investment amount from your PROFIT? Wouldn’t PROFIT indicate that costs were taken off the top?

Yes, you need to invest money back in to get more inventory so you don’t get to “pocket” that 6-7k if you want to continue your business, but it seems you are still “up” 13-1500 even if you put 5500 back in. No? As far as shipping costs, I have been paying that as a customer, unless of course I have purchased from an in home party.

Again, I’m not here to critique but to learn what I can about the investment. What am I missing?

I posted an update here. I think you are correct though – it is very confusing. You can read the details of the update and let me know if it makes sense now – if you have time. I’d appreciate it, thank you!

I am not involved with the company either but the math is indeed incorrect. You are not taking into account the cost that is being made back when selling an item. You are only counting the $18 average profit. So if you take into account the additional $10 wholesale cost plus the $18 profit that is tacked on top your 280 piece example would actually show as follows:

You are NOT selling each item for 18. You are selling each item for avg of 32. The total amount of cash in your hand from your customers is 8960

280 x 32 = 8960

Now I won’t even go over the extra items you still have left to sell. You spent 5500 on your inventory. So from the 8960 in your hand, take 5500 and put it in the bank. You have now paid back your entire investment. Now you still have 3950 in profit to either reinvest in more stock or forget about the whole thing and pocket it. No matter how you slice it, you spent 5500 for clothes, and now you have 8960 in your hand. In no math is that not a profit.

YOUR mathematical mistake is in thinking that the 5500 investment is supposed to come from your PROFIT. That’s not how it works. Your 5500 investment is subtracted right away from YOUR GROSS SALES of 8960. Because YOU DON’T GIVE ANY OF THAT 8960 back to LuLaRoe unless you chose to buy more stock.

So yes, of course if you try to say that your profit of 5040 is not equal to your investment, you are absolutely correct, but your GROSS sales are more than your investment – far more – and so no, you are not in the red even if you toss out everything you didn’t sell.

I do agree that their chart is misleading – they should say that your profits are 3950 assuming you never sell another thing. Of course I am assuming that you can then order as much or as little as you like to keep reselling – i.e. Use only $3000 of your profits to reinvest in product.

I am on neither side of this but just have to say that you do not handle different opinions very well on here. You come off snarky and cocky. No need to approve my post or respond. This is purely informative feedback.

You’re right, no snark. I don’t always handle comments in the best possible way. I am only human and quite frankly tired. I try to be fair and often I fail, but I try to get the comments out and share the good and bad sides of everything.

I have a feeling that you have been burned by a MLM before. I just went through the math tonight and came up with totally different numbers than you and trust me I have over 24 credit hours in college level math courses. The initial investment of $5,355 that is shown on the flyer will bring in $12,070 at retail. Now, $12,070(retail price) – $5,355(whole sale) = $6715. So after you pay off your initial cost you are left with $6,715 but you have to restock. Even if you just get the same order as the start up that will leave you with $6,715 – $5,355 = $1360 in profit after paying off the start up and restocking. If you again turn around and sell the restock items you will end up with $12,070(retail price) – $5,355(restock cost) = $6,715(profit). The average profit on items that come with the initial package is 44% at full retail and the average retail price is $39.28. After you pay off your initial cost to start you can make some good money if you sell a lot. Now I didn’t include any other cost just the cloths but I am sure there will be other cost associated with starting up. There is money to be made if you work hard and know how to do the online selling and marketing.

Nope. I have never been burned by an MLM or direct sales company, because I have never joined one. I have seen too many people I love and respect be wooed by these horrible investments, stuck in contracts they can’t get out of, driven further into debt with the false promise of owning their own “business” or having “financial freedom”. I’ve updated the math here. The investment in this company is still not a good one.

Oh sweetpea! As mentioned previously, you need to check your basic math. Let’s show you where it went south. I’m in the financial field and deal with this on a daily basis.

If you purchase 381 items at $5,500 that’s $14.43 investment per piece. Now you say each item has an average markup of $18. $14.43 + $18 = $32.43 (Investment + Profit = Total Purchase Price).

This is your statement: Let’s say you want to pay off your LuLaRoe investment in 1 month. According to the chart, you need to sell an average of 70 items per week, or an average of 10 pieces per day. If you meet this sales goal, 70 * 4 weeks in a month = 280 pieces sold. Your kit contained 381 pieces. You’ll have 101 pieces left to sell, and you’ll still be in the hole -$460 for the first month. IF you’re scratching your head, let’s back up: you invested $5,500 in your starter kit/inventory. You earned $5,040 from selling 280 pieces of LuLaRoe clothing. $5,500 – $5,040 = $460 shy of your initial investment.

Except, you are only using the $18 markup price point. Essentially, you are not taking into account the actual sale price of the item itself, you are only using the $18 markup. $5,040 / 280 = $18 (markup) not the total price you sold the item for. So, let’s say you sold the 280 items at the $32.43 (Which is what it should be), that equals $9,080.40 – your initial investment of $5,500 = $3,580.40 in profit.

Total profit after all inventory has been sold and accounted for = $6,855.83.

I can make it even easier for you. I bought 10 items at $10. My initial investment is $100. Now I’m going to sell those items at a $5 markup (I’m not greedy). The sale price is $15 ($10 + $5 = $15). Now, I sell all 10 items at $15 (10 x $15 = $150). WhooHoo! I made $50. My initial investment was $100 and I sold all of my merchandise for $150.

So, here’s the thing, while your math may be correct you’re throwing out random (low) numbers in order to support your supposed point. Before I go on, I am not a MLM consultant nor a LLR consultant. I am, however, a real business owner which I can guess you don’t know much about since you run a blog which is about as much of a business as MLM.

First off- every single business must invest their own money in equipment, supplies, product, etc. There is nothing surprising about this investment and the start up costs for LLR are surprisingly low when you consider the costs for opening your own brick and mortar boutique. Secondly, what business do you run where you make a profit in your first month after deducting all expenses for start up? Even the IRS doesn’t expect much of a profit, if any, in your first 2-3 years.

Your problem is that you are assuming consultants are only marking up prices by $4-5. Have you ever shopped at a boutique? If you had, you’d know a white tshirt would cost $18 (which is your assumption on average selling price). You can’t just decide on a number when attempting to prove a point. An average of $32 per item is an incredibly realistic price. Now, that’s not to say that its realistic for all markets and areas of the country. That’s on the consultant to know her market, though.

If you sell each item for $24, and we will assume you’ve only sold 280 pieces, you make your money back PLUS another $1220 profit before taxes, expenses, etc. Where did you even come up with shipping? For one, your shipping estimate is way off and business owners (or consultants) in this case don’t typically cover the cost of shipping. That cost is passed on to the consumer.

I don’t disagree that LLR isn’t worth it, because it’s not. Why? It’s a trend and a fad. It has nothing to do with start up costs and average selling price. The point that was attempted to be made in the comments is moot. LLR has their own expenses. Selling to the general public IS essential because if that stops happening, they stop recouping all expenses for marketing, payroll, supply houses etc. Its no different than me purchasing through a wholesaler. Sure, they are recouping part of their cost and maybe making a small profit but if I don’t sell my product to the public then I stop ordering from them and they stop making money.

Also, being an asshole to people doesn’t help you at all. Part of being a grown up is taking criticism with grace.

I am not a LLR consultant, but I am an accountant (with Enrolled Agent certification), and your math **is** wrong. It made me laugh out loud the first time I read your article. Please contact me and I can walk you through step by step on why the math is wrong. LOL. Still laughing. I am fine with you criticizing LLR and MLM’s in general (I have no skin in the game whatsoever), however, misleading people with your so-called facts to make your point is grossly unfair. Regardless, everyone should run their own number and do their own due diligence and not rely on what others have to say, anyway. If you aren’t doing some basic projections for yourself before signing up for something like this, then you should be.

Thanks, Susan. I am embarrassed that I counted the investment twice. When I was going over the math, I just kept doing the calculations and not checking what I put into my formulas. I posted an update here.

Hi! Thank you for this awesome breakdown of how to make profit and ur analysis of DS companies. I’m a Chloe + Isabel merchandiser, could you do an analysis on this company when you have a chance? I would really love to hear ur thought!!!

I’ve been trying to figure out the appeal of the clothing. Personally, i think it is psychological. I’ve noticed that there are just so many prints/colors made. I’ve seen the same “shoe” print on their skirts as I have on their shirts. The possibility of finding something that you like, in a specific print, seems to be exciting as in an addictive sort of way. I may not see that print again, in my size, so i have to purchase it now. Which also makes me wonder if the actual business purchases the fabrics, inexpensively, from productions that don’t sell . There are just so many odd patterns and colors. I have no idea how they actually sell some of it. The clothing is expensive and honestly, you can find t-shirts made just as badly at kmart for a lot less. Psych game with customers. It become competition . Just my thoughts.

YES true, this is like anything and it will be old news in a year or two, prob less. The hype will end, the customers will have 20 pairs and be done, ………it’s also only a real plus size market, I am like size 9, and I dont really feel it is fitting, ,,,, I can go to a rack for a M or L,,,,,,,,,,,, lula sells to xxl people who can’t find clothes on the rack, so it’s a plus size ordeal and yes addictive,,,,,,,,,,,, loud clothes,,,, it’s embarassing actually. It will be old news in 2 years,,,,,,,, ps and soon enough family will nag and bug to attend a show or have a party, that’s the horrible part,,,, MLM it is…. same theory, LLR makes money and the consultants are the customer,

Came across this article as I have a friend thinking about joining Lularoe. I am an accountant, and noticed many comments saying your math is wrong, so, of course I check it. The only issue (and it’s rather small) is that your first batch of of 381 items cost 5,500. However the following batches cost 5,000 but you assumed the count of inventory, which, it should really go down to about 346 when you average the cost of an item to 14.44. However, that’s being picky, when your entire presentation is easily explained, unfortunately people are just getting lost by it all. Thanks for sharing this and for giving good advice to a very risky business model.

My wife just bought clothes from Lularoe, and having never heard of them before, I did a little research and stumbled across your article. I have no skin in the game whatsoever (don’t know any consultants, and this was the first piece of clothing my wife has purchased), but I did want to clarify a few points about your financial analysis.

As you say in your post, Profit=Revenue-Expenses. Thus, if your profit is greater than $0, you have “cleared” your expenses and any revenues on top of that are Profit. Using your numbers, if you Profit $18/item (you actually sell the item for $32 — $14 of which goes to Lularoe and $18 to you, a 56% profit margin) and you sell 280 items, you have a Profit of $5,040, not a Revenue of $5,040 as stated above. Selling the additional 101 items nets you an additional Profit of $1,818, for a total Profit of $6,858 less any operating expenses (shipping, hangers, clothes racks, etc. —- let’s say $1,000 for your first month for this example. It will be less the following months). Your first batch of Lularoe clothing nets you $5,858. This is after paying back yourself, a personal loan, CC loan, a friend, your parents, or whomever. Now, you can purchase another batch using your profits from the first, leaving you with $358, no debts and 381 items of clothing worth around $12,000. The speed at which this turnover takes place does depend on your ability to sell, the market you’re in, and the time you allocate to it along with several other factors

MLMs have a bad reputation and perhaps deservedly so. They lure large financial investments with the promise of a quick return and a life of ease if you follow “these simple steps”. Yes, Lularoe is guaranteed a profit from attracting customers/distributors, but there is still a little meat on the bone for distributors to make a moderate income. Yes, there is risk, as there is with any “business” but Lularoe commits to buying back any inventory at 90% of what you paid for it. The quick and dirty math on that is, sell 30-40 pieces to consumers and decide you hate it, Lularoe buys back the rest and all you lose is time. Conclusion: Lularoe is not perfect, but it’s far from a scam.

As a side note, $5,500 seems a bit excessive, but I would be more skeptical if a business did not require some sort of startup capital.

I feel very dumb, and wish I could edit my last post, as, being an account, I ignored the obvious flaws and glanced through the reading. I am against MLM and their model, but also against misinformation. Please listen carefully to your error in the math you are presenting, please listen, and do not disregard this like many comments above, I’ll be careful and explain how you’re looking at this vs how you should.

You invest 5,500 and my clothes, this is your inventory, great. You stated making profit of $18 per item, and, there are 381 items in that batch. So, the profit you make is 18 per item x the 381 items, which is 6,858. You have more than doubled your money. Now, you say subtract the 5,500 and be left with 1,358, this, is completely wrong. You have now just double counted your expenses.

Let me put things another way. You buy in for 5,500. You then mark up each item $18.00. You receive 381 items so the average “cost” per item “expense” is about 14.43. So, your selling price is 32.43. When you sell all 381 items, you have revenues of 12,358 and expenses of 5,500, giving you a profit of 6,858. You have more than doubled your money. Now, you can order another bath of inventory, but, that does not change the 6,858 profit.

To look at things very basic, calculate the cost per item (14.43) if you mark it up by $18.00 per item, you more than double your money, its that simple.

Another example is this: A home is for sale for 120K, you believe you can buy it, and sell it quickly for a selling price of 240K. Now, you buy the home, and sell it for 240K. You just came away with profit of 120K.

With your logic, that same problem would say you have 0 profit. Here is why. You buy the home for 120K, you then mark up the home by 120K. Your profit is 120K but then (here is where you go wrong), you need to pay yourself back the 120K, so you have true profit of zero, according to you. But, you know you just doubled your money…

Everything about your math aside from that major flaw is ok. I really hope you see that now, and see why so many commenters were frustrated. I hope you can correct this blog and provide accurate information. I’m against MLM and really hate selling anything as a middle man. Let me know if you have questions.

I am impartial here, I am just trying to evaluate if this is a good business for my wife to get into, and I seem to have trouble reconciling your math as well. When you take (381 pieces * $18) – the $5500 initial order, you are stating that $18 is what you are charging per piece. 381 * $18 would only give you revenue. That is not $18 profit.

To do this correctly, (and I apologize if I sound condescending that is not my intention) is to take your intial $5500 investment and divide it by the # of pieces. That comes out to paying $14.44 per piece. Adding on the $1.50 for shipping and packaging that makes the total all-in cost per piece $15.94. If you THEN want to make an $18 profit on each piece you would need to add $15.94 + $18.00 and charge $33.94 per piece. (I agree that if the quality is poor that IS expensive) – Anyway, if you are charging $33.94 per piece to make your $18 profit; $33.94 * 381 pieces = $12,929.50 in revenue. Your intitial costs are ($14.44 + $1.50 shipping) * 381 = $6071.50, which would give you a profit of $6,858.00.

I do however find over a 100% markup on these clothes to be obscene however so if I were modeling a real case scenario I would that a 35% markup on the clothes is more accurate. That would make it so that your all in cost to purchase the clothes is still the $15.94 you quoted per piece, and you would sell them for $15.94 + 35% = $21.51. That would give you $21.51 * 381 = $8196.53 in revenue – the $6071.50 cost would give you $2,125.03 profit on your first order. You then of course need to buy more inventory but running the case through several times, you’re playing with house money after the second order.

Again I am NOT a consultant, nor do I have any affiliation with Lula Rue or anyone else. I am a guy with a Finance BS and an MBA who is trying to analyze the business for my wife to see if we want to our invest our money into it, and I had an issue with your profit calculations. Please feel free to reach out if you have any questions and I will copy my excel work below to show you my math.

Thank you. I see what you’re saying. I need to go back and review. I believe in my original calculations and drafts I had more information that I may not have included in this piece. Repurchasing inventory, for example, is one part of the equation I may have left out in my explanation. Thanks for taking the time to break this down for me. I do want this article to be helpful and accurate.

Another MBA and numbers person here. I agree with Steve and Mike, your warning is wise but the math is off. In your example “you earned $5,040 from selling 280 pieces of LuLaRoe clothing. $5,500 – $5,040 = $460 shy of your initial investment.” $5,040 was the profit given in the table, not the revenue. The example they gave (assuming the markup given) was $9,240 in revenue (an average selling price of $33/piece).

Hi Marisa, Thank you. I posted an update here: LuLaRoe or LuLaNo: Calculation Flaw, But Still LuLaNo. If you (or any of my readers who pointed out the flaw) would like to do a check on this update for me, I’d much appreciate it. Thanks again for reading and for bringing it to my attention.

It seems like a lot of folks are looking at this as if one hypothetically sells everything from the initial investment, they would be able to put the same amount into replenishing the inventory and then keep the rest. However, what about the marketing costs (including promotions, giveaways, etc), shipping expenses, materials (packaging, etc)? And what about taxes? Plus, you cannot simply replenish your inventory with the same amount. You have to buy more inventory. And you have no control over what you get. I have shopped LLR, and I have noticed the groups that do best are the ones with massive inventories (like 1000s of pieces) and other sales people. This is a hustle game. The one variable that would make me nervous is that you cannot control what you order. That right there will surely cost you money.

You can control the sizes, styles and number of pieces you order. However you don’t know what prints you will get. This is very helpful because as is true in any form of clothing sales if I only sale pieces that I like I will never grow my customer base beyond people who like similar things. Having pieces that do not necessarily appeal to me opens my inventory to all types of people.

This is the problem with the internet. People use bad facts (or in your case incorrect math) and it spreads like wildfire because most of the rest of you can’t do math either.

I will do the math below, but the short and sweet of it is, you never calculated a cost per item to which you would add your profit per item. You never had a valid revenue number.

If you bought 381 pieces of clothing for $5,500, your cost per item is around $14.44. You neglected to use this figure at all. You add the “$18 profit per item” and you get a total REVENUE per item of $32.44.

Now that you know how much you’ll gross per item, you can multiply by the number of items (381 x $32.44) and you come up with $12,359.64

Then you take your initial investment out, and you’re left with $6,859.64 in profit. So their math is right, yours is wrong. I don’t think their numbers are realistic, but their math is correct given the assumptions.

Or we could skip all of this and just know that profit = profit and “$18 profit per item” into 381 items = $6,858

You found the profit, then subtracted the expenses from it again.

* No relation to LulaRoe here in anyway, so I have no motive other than pointing out bad info. I don’t think LulaRoe is a great deal, and wouldn’t recommend it based on risk and the restrictions they put in place.

I see what you’re saying. Let me go back and review. Thank you for bringing this to my attention. I think the mistake is one of two things…either you’re not truly purchasing inventory – just a “starter kit” with marketing materials, and you must pay back the inventory as you go, or my calculations included repurchasing inventory. Either way, thank you for providing your analysis. Much appreciated as this article is intended to be helpful and accurate.

From speaking to reps in my quest to find out if llr is viable for my wife I found after initial purchase you are free to buy any style/size you want with a minimum order of 33 pieces. So you can continuously keep inventory levels.

Let me preface this by saying I don’t encourage anyone to sell LuLaRoe and have no affiliation or even love for the company. However, you’ve taken something very simple and complicated it and your results are both wrong and incredibly misleading.

Let me break it down:

In the 1 month part of your chart:

You’ve sold 280 items (4×70) over a month for a total of $9,240

$4200 of that is used to replenish the inventory you sold leaving you with a profit if $5040. At this point you have a FULL INVENTORY (381 items) and you’ve repaid the lion’s share of your investment (minus the $460 you refer to). You can either sell those 381 items at 100% profit and never deal with LuLaRoe again, or use some of the GROSS (money you make selling the items) to replenish your inventory, what ever you have left will be your NET profit.

I have a limited time as well as I’m a father and work a full time job but I’d be happy to walk you through this 1×1.

I find it so problematic that people would attempt to earn (exploit) an $18/piece profit off their friends. These are people you’re supposed to care about and instead your profiting off the relationship. I get that people have businesses and earn a living. But I’m not gonna directly sell cheap clothes to my good friends while knowing I took them advantage of our relationship for my financial gain.

what are you tlaking about….have you ever run a business? Here is a business basic principal…. HELLO????? if someone is looking for a product…. why not buy that product from someone you know, trust and have a relationship with….????????? why go to Target and spend you $$$ and give it to the big box businesses??? WHY IS THIS SO HARD TO UNDERSTAND?

It’s so hard to understand because you can buy leggings for much cheaper, at the same quality, from Target or Amazon. In fact, here’s a bunch of leggings you can buy for $3 – $11. WHY IS THIS SO HARD TO UNDERSTAND?

So when target does it.. thats ok … ??? REALLY???? ????? You dont have to charge that much of a profit margin on any piece.. i know who you are buying from… but find another lularoe consultant and develop an actual realtionship….big boxes make there margins well above and beyond that percentage wise. Not only that… LulaRoe provides a fair wage to employees making the garments and uplifting the communities they are in.. can you say the same of the big box stores….. including macy’s , dillards and all your wonderful labels…..

Yet LuLaRoe provides zero wage to its retailers. Sorry, but if the product was such a hot item, LuLaRoe would sell it at a high price on its own. If it was guaranteed to turn a profit, there would be no initial investment cost – it would simply be a commission based model, where consultants could sell the product and earn a commission on the markup without ever having to risk their own money. The fact is LuLaRoe profits because the consultants are their customers. LuLaRoe does not care if you are successful or if you fail. They have already made their money. And, when they buyback the inventory at 85% wholesale, what do you think they do? My best guess is that they resell it at 100% profit, making an addition 30% for themselves. Classy.

Its not off of friends its off of customers these consultants are business owners. Lets say you work at a supermarket, the owner of that supermarket is making a profit off of every item same thing. Its how these ladies are supporting themselves and achieving financial freedom.

In most cases people are soliciting their friends and family members. In most cases, they do not end up supporting themselves or achieving financial freedom – they end up losing money and being worse off than before, and without a support system. Evil, evil, evil.

As others have mentioned, based on the graph you posted, your math is incorrect. If you sell 70 items per week for 4 weeks (280 items) your gross sales are $9,240 then you subtract the $5,500 initial investment and you get $3,740 profit. They show $5,040 as profit because that is the profit if each item sells for an average of $33 which is $18 over the $15 wholesale price. That math is still good because that is the profit, how you choose to use your profit, like paying back your initial investment or reinvesting it, is up to you. Your math is based on each item selling for $18, which is just not the case if $18 is your profit. I know it can be hard to admit when you made a mistake but to continue to say that your math is not wrong, when it is, discredits you. There are a LOT of great things about this article but your refusal to admit this math error (which is kind of a big deal when talking about this sort of thing) isn’t doing you any favors. I had never thought of consultants as customers but that is SO TRUE! I really appreciate the things you said, but please change the math.

Be sure to check your Facebook groups. I found without being asked that I was added to a large number of groups for this MLM. I’m not pleased. If the people come to you, why do you need to add me? I suggest that many of you check your Facebook groups to find out who your real friends are.

I was told that I don’t have my facts right and was linked to drink the kool-aid pages saying how rich everyone was getting while reading about people getting loans in desperation to not be passed up for being onboarded. I wish for women to make their own money, but 5k is half of many home down payments. Then just rent out the house and be a landlord with a write off, or pay down your current mortgage for more family income. Just so many other options. Take a class where you learn a skill you can market without paying someone else for pizza tights.

One question, if they send you product that nobody wants, do they buy it back at the same cost and pay for the s&h?

I actually thought of this as a well thought out, informative article until I read some of the comments. The tone in which you reply to commenters that even slightly oppose you is pretty appalling. If you are even a modicum of the expert that you seem to think yourself to be, you would do well to censor yourself a little.

Although your math is wrong, to clarify. Lularoe DOES buy back there products for 85% of its worth. One pack of legging(a set of two) is 21$. So 10.50 each pair is your initial cost. If you can not sell your leggings, they will buy it back for 85%. Also, if you can not seem to sell lularoe, they will buy back 85% of your entire inventory. So your only risking 1,000$ if you do not sell ONE item from them. Also, other consultants will buy you out. Meaning they will pay you wholesale for each item if you decide to stop selling. Lularoe also has a 85% retention rate. I am not affiliated with lularoe. So im not benifiting from any of this. Jist throwing facts out there for people information, MLM isnt for everyone, but this seems like a classic buisness model to me.

It’s not just snark, it’s venom. I agree with Hayley. You’re sharing important information that could save many women from a lot of heartache. But sister, let’s help each other out in love! Gracious dissent makes us all stronger, better informed, and more empathetic. The biting sarcasm and bitterness make me hurt for you and whatever is causing all that negativity.

She was told months ago her math was wrong. I’ve followed this article for months and people didn’t start getting “snarky” until they noticed their comments were being deleted.

I only have an Associates Degree in Business but the simple Business Math course in most any college teaches the very basics of what she was missing.

No mathematician would agree with her figures.

It’s not hard folks. You buy any product at wholesale and sell at retail prices. Your net profit will be anything left over after operating costs (postage, packaging, hangers, etc.) and wholesale costs. In LLRs case that is generally going to be 35-45% of your sales. Factor in taxes and you’ll likely have 30% overall net profit after you’ve reordered inventory.

I have no idea what the authors spill is but it’s certainly not based on sound reasoning or business sense.

you’ve lost a reader with this post. You are sadly misinformed and no matter how much you say to the contrary, your math is incorrect. you’ve been called out by numerous people and still refuse to believe that, *gasp* omg, …could you possibly be wrong??? grow up and put your big girl panties on. And yea, yea. I know, I know. Your big, over-inflated opinion of yourself wont possible allow you to consider the fact that you may have erred, just a little bit. And before you ask, no. I dont sell LLR but I know several people who do and they have made their initial investment back, plus a whole lot more in 2 months. My personal opinion? Your panties are in a twist because you’re working a full time and working your ass off in grad school to get a job where you have work like a dog to make the same amount of money that a lot of the ladies who put forth the time and effort to make their business successful, will make. (I know, longest run on sentence of my life but it’s 11 at night and i really dont care.) Have a good night. Try and be objective, which this blog is not.

I agree that this isn’t for everyone. Maybe someone with a lot of time on their hands, money to invest(gamble with),and business savvy might give it a shot without too many repercussions. Definitely not for someone unfamiliar with sales, customer involvement, and managing inventory. But to be fair, your math IS wrong. For example the 101 pieces of inventory left over are not sold for $18 profit only, but for the profit AND the initial cost(something like $14.30 according to their calculations). I stopped there because you did speculation from then on but I am happy your article helped SOME people. PS. Apologies to my daughter for not loaning her the 6K

I am not a Lularoe consultant. But…….my husband just showed me this article and I laughed when I saw your math. And then read the comment telling you your math was wrong and you said you had it checked out. Your math is correct if you only sold each item for $18. But you BUY your inventory. Just like any retail store. And if you sell a pair a leggings for $25, then you get $25. If wholesale is $10, then you would profit $15. And $10 would pay for the inventory you purchased.

An example of your first inventory to start up…..say you pay $5000 to start up and you have 381 items.

Just an FYI, I have already agreed to review the math. I do not delete comments. There are thousands of comments pending and, as this blog is not my full-time job, I have not approved all the comments yet or updated the article. Thanks for understanding.

If you go on consultant pages, you will find a lot of “going out of business” sales. I did not realize the company allowed the consultants to sell the pieces for less than is suggested though. I haven’t seen much of that. For fun, a pair of Halloween leggings or a cute shirt here and there, it’s got some items I would wear. Most of it is cheap, overpriced and really tacky. You can go to Old Navy, Target and many retailers for items they sell at 1/3 the price.

Your math isnt incorrect whats incorrect is that you said youd be out of inventory on the graph it shows that if you sell 70 pieces a week your sales is approximately $9240 but your profit is only $5040 that missing $4200 would be for restocking inventory. So you would definitely have inventory to sell for the next month to make an additional 5k in profit. I am not at all associated with LLR (other than being a customer) but I love business models and this one is amazing. If you treat it as a business it can be very lucrative and the exclusivity of the prints make it extremely sought after by consumers.

I see the main confusion everyone is having, you said “The LuLaRoe butter leggings everyone loves? They sell for 2/$40. This makes their retail face value $20 each” thats incorrect as well i am on about 20 consultant groups and they sell for $25 each i have never seen any of these groups list 2/$40 in fact I have never seen them post discounted prices at all. When they do have discounts its always message me for details they dont publicize discounts. How weird.

Also you mentioned the girls on fire page that page is for people considering becoming consultants that is the MAIN reason for that page. LLR shoppers or customers like myself dont go to that page. Sales are all on facebook and periscope primarily from what ive seen anyway. I have never purchased from a llr website only llr facebook/periscope.

I think many people are focusing on the hypothetical calculations and missing the point. Sure, you *might* make $10,000 off your $7,000 investment (inventory, costs, etc.), but that is only in a perfect scenario. Perfect scenario being A. You sell EVERYTHING you have at that 50% profit margin – which is honestly highly unlikely given that you have 0 control over your inventory and B. That you re-invest little to none of your profit back into inventory. The model is that you keep re-investing your profit back in for inventory. Sure you get back that initial $7,000, but somewhere down the line your going to be saddled with a huge inventory of ugly leggings that are worth next to nothing. The risk/reward is just not worth it and any person with an ounce of business sense spots these scams a mile away.

The only way to make money as I see it is to buy once, sell everything at a 50% mark-up and then get out before everyone moves on to the next MLM scam. But I’m sure there is some restriction somewhere down the line to prevent this from happening.

And all the people that chime in about their normal business inventory and how you purchase upfront and then make your money back – I highly doubt you throw $6,000 at your suppliers and just cross your fingers that you get something that you can sell.

Thank you! You hit the nail on the head. My calculations had an error, and I posted an update here. But you are absolutely right – the hypotheticals are the best possible case scenario. And most people are not turning a profit with MLMs or direct sales.

After reading this I simultaneously agree and disagree with you. I do not believe that direct sales is a scam. It has actually been around in some form or another since the beginning of civilization. I also believe that the many successful Mary Kay, Avon, Arbonne, Rodan & Fields etc. consultants would also disagree with you. I do believe these companies are misleading in not being straight forward with just how much work and investment is necessary beyond the initial kit. I am not a LuLaRoe consultant, but I am a Jamberry one. What you fail to mention is that not everyone enters this to make a full time living out of it. I have always been the biggest opposer to direct sales and then a couple of months ago a friend got me to try some nail wraps and I fell in love with them. I have no business background but decided what the heck! I love these so much and am genuinely excited to tell people about it. I figured I’d be happy if I just made my investment back and would have a discount on the wraps I ordered. I made that investment back just in my launch party, and I continually have people ask me about my nails and can make sales rather easily. Am I making a full time income or even part time income? No… But I like having my own litttle “business” or whatever you want to call it and make that bit of extra money on the side. Not to mention again, that I love the product!

With LLR I only know three consultants, and two are doing incredibly well! One is doing it full time and the other juggles it with her full time job. They both made their initial investment back rather quickly. The one that isn’t admits she was not prepared for how much work it would be and the amount of organization and leadership needed. She admits that her sponsor has not been really helpful at all. Now that she is changing things up she is starting to see those returns. So I believe it is unfair to classify it as a scam and go on about your numbers without looking at it from every perspective. I find it interesting that the accountant that replied on here explaining how your numbers were misleading, you had nothing to say to. That alone says a lot. And to the other that said you sounded bitter, that is exactly what I though when I read it. That may very well not be your intention, but it sure does come off as this is where you come to “un bottle” your bitterness. And lastly, yes, your response to some of these comments speaks volumes and are appalling as another mentioned above.

I am happy to send anyone considering direct sales to this article, in fact I think it should be a requirement to read before joining. That way they can get the most negative perspective there is and then look at the others and make a decision. Because for everything you said you can not deny that there are many that have and are doing well in this industry and everyone should know that as well.

The fact is you’re more likely to win at roulette in Las Vegas than to turn a profit with an MLM (source). Thank you, though, for your comment. I’m happy to post it and share differing opinions. Thank you for reading.

My husband did his own analysis of the numbers before I signed up in January and found numbers to be much more favorable than you’re presenting. LuLaRoe has added an extra $9k in INCOME to my family (after setting aside funds for taxes and reinvesting) per month. So thankful I took the risk.

Great article, I wish I could have sent this to my friends before they became consultants. The only thing “wrong” with your math is that you didn’t include the profit loss from the items that consultants are pushed to give away for free. Weekly and monthly giveaways and free lulacash.

This is an extremely well thought out review. Thank you so much for the information! I am not interested in any MLM scheme including Lularoe, but I was invited to a party by a friend via Facebook. I’m horrified by companies which perpetuate the idea that they are “helping women” when, in reality, they are preying on women. I’m also very concerned that these companies exploit labor in poor countries.

You mentioned that you are in a graduate program and if you don’t mind me asking, what is your area of study? The MLM or direct marketing phenomena disproportionately targets women who want to stay home with their families. This, to me, is an issue that needs to be brought to light. We often hear about the near impossibility of making programs like this bear fruit but is there rich discussion about how women in particular are affected?

Thank you, Jennifer. I’m studying communications with concentration in investor relations. I’m passionate about this subject and will be writing more. There was an error in my calculation, and I’ve owned up to that here. If you know of other MLM/direct sales companies I haven’t explored yet, I’d love to hear about them! Always looking to help women avoid getting scammed.

I have not read ALL the comments but the majority. I was SERIOUSLY considering becoming a consultant. I keep being told that it is not over saturated by other consultants. But I just don’t believe it. The you go into these groups and they keep trying to sell the same stuff over and over for months with no one buying. They sell maybe a few popular prints and then left with crappy inventory that ALL THE OTHER CONSULTANTS ARE TRYING TO LOAD OFF TOO. There are just not enough buyers for the non “unicorn” prints. Eventually to get their money back, they have to sell at cost. Also, now there are tons of tons of reports with the leggings coming with holes or getting holes after just an hour or so of wear. I have several pieces. Not a LLR hater….but I think they are getting too big for their britches (no pun intended). Corporate has got a little money hungry. What was a great idea is now just starting to become over saturated and taking advantage of consultants IMO. They need to cut off for new consultants and start better quality control. Otherwise, this is going to piss off a lot more people than make happy.

I think it’s great that you are trying to be helpful to others looking into LLR. Unfortunatly the math is very wrong, which is not giving people an accurate representation of the opportunities that LLR can provide. It can be very confusing, and I had to play around with the numbers for a good couple of hours to make sure I understood correctly. Basically your big error was calculating the net income as the gross income. The gross income is how much money you gross after selling the clothes. The net income is what you make after you re-stock the inventory that you sold. I just don’t want people to be mislead, as I can see is important to you as well.

You can assume whatever you want dear, but that just makes you look like an idiot. My friends divulged their financial information because I was inquiring about being a consultant. I ultimately decided against it for no other reason than I don’t think I have the time to put into it while I’m finishing my masters. The fact remains that they’re still making a nice income on a regular basis. You can hate all you want to, but it doesn’t negate the facts. Sounds to me like you’re just a tad jealous of others success, possibly because you know you couldn’t hack it on your own. Either way, if you’re not actually in the business, then you really have nothing to base you misplaced rant on.

It’s not the first time I’ve been wrong and it won’t be the last. I posted an update here. In my opinion, LuLaRoe is still a bad investment and it is way out of line with industry averages for retailers (in a way that is completely suspect).

Ever since I saw somebody on YouTube rant & rave about LulaRoe, I did a little investigating. I am very skeptical of the MLM deals—I do not know one single person that ever made a lot of money on MLM, and most of them abandoned it before a year was up. (I happen to know 2 people in particular that have done several of the MLM schemes—essential oils, cleaning products, and now LLR. The prior MLM’s schemes didn’t fulfill their dreams of driving a Mercedes, so they switched to other MLM’s thinking they were going to be different.) There are tons of women online that say how great it is—-dedicating 40-60 hours a week to a “business” that brings you $10-$11/hour is not something I’d want to be involved with. Especially a “business” where you have very little control over anything—and by that, I mean the products that you sell. LLR sends you whatever they have in the print that’s available—because, I am assuming, those are the materials they could find for the least amount of money. They claim that only about 1,000 items are made with each material print, and I am pretty sure I know why: The material (polyester) that they are purchasing are remnants/leftovers of much larger pieces of material that they’re getting at rock bottom prices (from China, the largest manufacturer of polyester in the world). The material was not manufactured for LLR. Solid colors would cost more. I have looked at the clothing for sale by several “consultants” and, quite honestly, the prints alone make the item worth far less than what they are charging. If the pieces were in solid colors, they would be MUCH MORE appealing.

What I would really love to know is exactly how much LLR is paying to have each piece manufactured compared to the amount of money each “consultant” is spending on their inventory. I would be willing to bet the leggings cost LLR about $5 to manufacture, since they have outsourced the manufacturing to poor countries—Guatemala, Vietnam, India, Mexico, Korea, etc., with polyester from China. Apparently, from the beginning, that was one of LLR’s mantras—-that their clothing was manufactured in the United States. If the initial “investment” by a consultant is between $5000 and $7000, I would bet that the consultant’s entire inventory only cost LLR about $1500 to maybe $2000 to manufacture. Your analysis and assessment of the LLR “consultant” as “customer” is 150% correct.

Buying items at wholesale & selling them at retail is the basis of any consumer business. Every store does it. HOWEVER—LLR is the entity purchasing the items at the REAL WHOLESALE PRICE, not the “consultant”. Buyers of any retail store purchase their products DIRECTLY from the manufacturer—not from a “middle man”. Furthermore, those store buyers have the freedom to purchase the items they want, which is much different than LLR. “Consultants” only put in their orders for “inventory”—-they have no idea, other than the actual products they are ordering—-what the colors will be or what the (hideous) prints will be. (I have looked at the prints & I have to honestly say that with a few exceptions, most of the prints are HIDEOUS. There was one “unicorn” outfit—leggings and a top—that had scissors all over them—for $100. I wouldn’t be caught dead in that outfit. There were other pieces too–leggings with birds all over them, leggings with octopi all over them, a dress with some weird print that was not even latched up at the waist & looked ridiculous—that even on a clearance rack, I would buy & wear. A “consultant” would have much more control over their “business” if they went to thrift shops, consignment shops & places like TJMaxx and purchased items that they liked and that they thought would actually sell. Shoot, you can go to a store and shop the clearance rack for items, buy what you want and then sell them for retail price. You can find stuff in consignment shops with the tags still on them, priced very well. Furthermore, having to “sign up” under another “consultant”, submitting all your information into the “Audrey” system & taking payments through that system is a big control mechanism. REAL retail businesses can accept payment any way they want—-cash, credit card, debit card. Retail businesses also manage their inventory via the bar codes on the items when they are checked out—-smaller home-based retail businesses can keep track of inventory on an Excel spreadsheet. LLR consultants are not true retailers—the cost that LLR is purchasing the clothing for is probably far closer to the actual retail price of the items. I know I can buy leggings—and I mean QUALITY leggings, in solid colors, that fit well—for less than $20. Costco carries very well made leggings for around $16/pair. That is around the same price a LLR consultant is purchasing leggings for, and then jacking the price up to make a profit. TJMaxx, Target, Costco, and many outlet stores carry good quality leggings for $20 or less—-and they come in solid colors, not crazy, Aztec prints. I would never pay $32 for a pair of leggings that were commercially made in a poor country, where the workers are making $.50/hour. I have seen many posts online from people who have spent $45 on casual dresses and some kind of “kimono” for $40.

The simple fact that many LLR “consultants” have not made nearly as much money as they thought they would, and they have actually listed their remaining items on EBay, for which they are seeking the same amount of money they paid for the item, makes LLR a losing deal. Why pay $32.50 for a pair of leggings you can purchase on EBay for $15? Currently, there are 42,446 LLR items for sale on EBay. Lots of those items are listed way below the retail price consultants are charging—-so why would you buy something from a consultant when you can buy it from EBay for half price? (I found may listings for leggings selling for $11 or $12—apparently, these people are trying to liquidate their inventory and just get back what they spent on the stuff.)

I definitely find this article snide and misleading. Yes your math is correct but your assuming so many things. Prices are variable, Some pieces go for higher profit then others. Yes your math is correct, but you are basing it on averaging and. It accurate data which can vary.

How do I know this? I’m a cardiac specialist who took on the hobby of selling Lularoe- and my Numbers are much better then your negative sad sappy bitchy blog. You are missing one wonderful point; the wonderful friendships women gain and joy, even if bonding over leggings.

The wonderful friendships women gain by exploiting their network of friends for profit? Puh-lease. That is what MLM and direct sales companies pitch, sure. But you know what? As a cardiac specialist, I’m pretty sure you don’t need the money. You’re not one of the women who is completely financially insecure and being preyed on by these companies, because these companies know those women don’t have the power to fight them, in court, over illegal business practices. Often, the women they target are just trying to get their families out of poverty or off food stamps. It’s taking advantage of people’s desperation for something that is not a sure thing – and it’s truly an evil business practice. That’s why I’m passionate about this subject – there are people who are constantly being sold a dream that isn’t attainable, and it’s such a gross thing for a company to do. I truly believe women are competent, capable and have the potential to be so much more than an MLM consultant. I’ll gladly take the heat for those women any day. Thanks for reminding me why I care so much about this subject, even though your comments were intended to just tear me down.

I was encouraged at the beginning of this article to read that it would be an objective piece. By the end of the article your bias was practically dripping out of every word. That coupled with the math errors you have yet to address have sent me off to find a truly objective article.

No. I have never done direct sales or MLM. It does not make financial sense to engage in this type of business model. I am passionate about helping people and preventing people in bad situations from being exploited. Direct sales and MLM companies are known to prey on the financially insecure. This is a disgusting business practice.

Maybe some direct sales companies do but LulaRoe isn’t one of those companies. I do not think you have done your research because the company actually buys back inventory that you can’t sell. And if you have never been apart of the business then I really feel you have no right to tell the people commenting who are actual LulaRoe consultants that they are wrong. The consultants do know more about the business then you would. There have been a number of people trying to show you why your math is incorrect but even though you have zero experience you still refuse to listen. I normally don’t comment on these things but this just puts down all the woman who are part of this business and are succeeding at it and those woman work hard to provide for their family whether they are in financial trouble or not.

My opinion is LuLaRoe absolutely is one of those companies. I don’t have to be a LuLaRoe consultant to know or learn about the business model. I have listened to those comments and I’m amending the article. Lastly, I don’t have to explain myself or my blog post to you, but I hope you appreciate that unlike many other blogs, I do take the time to respond directly to my readers, whether they like my opinion or not. Enjoy the rest of your weekend.

Kaylan, you state that LLR isn’t one of the direct sales companies that preys on people, and that LLR buys back inventory that you don’t sell. But, don’t they charge a 15% “re-stocking fee” and you have to pay for the shipping back to LLR? So, either way, you’re losing money to replace that unsold item with something else, right?

Didn’t LuLaRoe change their “on boarding” process within the last few months as well? Up until a few months ago, consultants could get their initial inventory which included leggings. They changed the initial package to $5,600 worth of stuff and there are no leggings included—-but a consultant can purchase an “additional package” of KIDS LEGGINGS for $1,320. Still no women’s leggings, which is the item LLR is known for, right? I fail to see how almost $7,000 worth of clothing items that do not include any women’s leggings is a good investment for anyone. There also used to be freebies & incentives, but not any more. It seems that LLR corporate became very greedy—they outsourced manufacturing to sweatshops overseas, they now “onboard” 300 people every day, and the initial $7,000 investment does not include any of the signature item they are known for—-the leggings.

Furthermore, the BB has given LLR an “F” rating. Many complaints have been filed against LLR, mainly over their poorly manufactured items. This shows me that LLR corporate doesn’t give a hoot about quality—all they care about is purchasing clothing items from sweatshops for pennies, selling them to “consultants” and then they couldn’t care less what the consultants do with them as long as they’ve received their $7,000 from 300 people every day.

All MLM’s work according to the same business plan–buy the stuff for pennies, sell it to people for retail, then let the people sell it for whatever they want. You cannot tell me that any pair of leggings is worth paying more than $20 for. I don’t even pay $20 for the thermal sports leggings I wear to run in the fall and winter!! I can get those leggings (from name brand manufacturers like New Balance, Nike, Fila) for between $10 and $20 in TJMaxx.

There’s a ton of LLR stuff on EBay for rock bottom prices—leggings for $10, especially. If you’re smart, you’d check out EBay before blowing $32 on leggings from a consultant. They are the exact same thing. It seems that many people are just looking to dump their inventory & at least re-coup what they shelled out from the beginning. And LLR couldn’t care less—they already got their money.

Your information is simply not correct. And since you’ve been saying for some time now that you will check your math, I’m assuming you are aware so there is no point in my addressing how OFF you in fact are. However, I recently spent the day at a LuLaRoe training, in a room with 1500 women, all of whom are successful within the company. And happy, and loving it. Women who are able to stay at home with their kids, pay off medical bills, student loans, save for retirement. Husbands are quitting their jobs and joining in because…shocker…they are making money. All kinds of women, from all walks of life. And it is not a scam, no one is getting ripped off and no one is being harrassed. Sure, LuLaRoe clothing is not for everyone, but it is good quality, it sure is comfortable and fits everyone. You want to go to Old Navy and buy yourself a shirt, go ahead. Tons of people can do that and will have your same shirt. One of the fun and unique parts about LLR is that they make a limited amount of pieces from each print, so you know you are finding a unique piece. Shame on us for enjoying that! And shame on women for having a good time with fashion, because that is what this company is all about. It is building women up, whether they are selling the clothing as a consultant or joining in at a pop up party, the interactions are positive. There is something special occuring within the LuLaRoe community and it does not include the failure that you have blogged about here. The owner of the company is a kind and giving woman with a beautiful family and they have built something special. Oh, another thing about this company that only cares about making money off of all of us dummies… they match all donations on any fundraising event you do within your sales. Gross, I know. How could they?

As for all this failure and risk…if you are not succeeding LLR will buy your clothing back at any time or you can sell it to other consultants. You may lose some money in start up cost for your supplies, etc. but that is with any start up.

I think you need to get yourself into some LuLaRoe leggings and chill out for a bit.

The fact that people are complaining about this Blog is quite funny considering it is MRS. BOTTLESOUP’s PERSONAL BLOG. So if she wants to point out Crap clothing and the MLM scams….. she has every right to do so. I cannot believe that people are arguing with her about this BLOG. 1st – it was well written and researched. 2nd – it’s her BLOG 3rd – don’t freaking read it if you have your head up the MLM’s rear. 4th – it’s her BLOG 5th – the more you argue that LuLaRoe, Jamberry or any other MLM is wonderful- the more we know you are full of it.

I just wanted to add another comment after finding out a few other things about LLR.

Apparently, the initial package LLR consultants were able to “onboard” with included the leggings that everybody loves. NOW, the initial package includes NO leggings—so, your investment of $5,500 is only tops, dresses, kimonos. If you want the leggings, you have to purchase them separately from the initial package. Talk about a scam. So, consultants are into it for far more than the $5,500 that is told to them.

Another question I had that I cannot seem to find the answer to is this: How long does it take for a consultant to receive the initial package of clothing items after they place their order & pay for them? I have read a lot about the “on boarding” process taking a long time—-a few months, at least. Do the consultants place their order for the initial package, pay for it & then wait 2+ months to receive the clothing? That’s what it seems like to me. If that is the case, LLR is keeping all of the $5,500+ initial investments for a couple of months before they supply the consultants with their initial clothing packages—they claim they are on boarding 300 people per day. So, that math would be something like: $5,500 X 300 = $1,650,000 PER DAY. Yes, you read that right—-one million, six hundred fifty thousand dollars PER DAY, based on the $5,500 initial investment. (Now that LLR has changed the initial package to not including leggings, and the leggings have to be ordered separately for an additional $350 to $1,250, that $5,500 initial investment is actually more like $6,500-$7,000+.) So, they are holding that money, collecting interest on it for a couple of months, and then sending the initial packages out. How that can be a good business plan for the consultants is a mystery to me. It’s a GREAT business plan for corporate LLR—-they’re probably using the interest money to pay for the items of clothing that are being manufactured in sweat shops overseas. What I am seeing online is women that are all excited to become LLR consultants, they tolerate the waiting period & they are so excited to receive their “call” they don’t think about LLR holding their money for a couple of months before they get their initial inventory. Most women are using credit cards to purchase their initial inventory. Unless you use a 0% interest rate card & sell all of your initial inventory within the 0% interest time limit, you’re fine. But usually credit cards have interest rates anywhere from 9% (excellent credit) to 30% (horrible credit). Even a moderate interest rate of 13% is quite a bit of money if you have to wait 2 months for your initial shipment, and then have lingering stock month after month that you didn’t sell. Plus, consultants have to order replenishing supply every month—so they are putting more debt onto the card when they didn’t sell their initial supply yet.

I’m sorry, but if I am starting my own clothing business, I want to have total control over what I am selling, and I want to sell my stuff the way I want to sell, not have my selling methods dictated by a “parent company”. If a person could put in an initial investment of $5,500 for an order of ONLY leggings, it might be worth it. But to have to invest $5,500 in a bunch of clothing items that are going to be tough to sell just to get access to the leggings to sell is a total scam, and a typical pyramid scheme. If people can’t see that, they need their heads examined. If you were to start your own business, I am quite sure you wouldn’t invest several thousand dollars into things that would be difficult to sell—-you’d want inventory of stuff that is in high demand. You wouldn’t start a business in November & start selling easter candy, would you? You’d start telling holiday items.

I don’t know—I’m just a nonbeliever in these MLM deals. I do not know anyone that has done well with them. It is a heck of a lot more work than what it’s worth & if you’re lucky you make your initial investment back. If you work a full time job, which is your main source of income, and you are looking at LLR as an income supplement, you shouldn’t have to work another 40-60 hour per week on that supplemental income. If someone wanted supplemental income, a part time job would be much easier.

Wow 🙂 Holly your responses are intelligent and well researched. This was a pleasure to read. Two acquaintances of mine just told me they are “waiting” for their call to be consultants. I got pulled into the Lularoe world by accident as one of the other women had a pop up at her home that I missed. Naturally I looked into it and I am a comfy clothing lover and love leggings so I thought as a CONSUMER this could be fun to see and own some fun leggings. Maybe some cute shirts as all (the other clothing was WAY too expensive for comfy clothing). I have been known to drop some serious coin on some amazing threads but not on polyester most of which is not even soft (the shirts). I would say overall that I love fashion, clothes, shoes in general and have an eye for beautiful clothing that lasts. While SOME of their leggings are fun as well as some of their tops, overall there are sooooo many UGLY, UGLY prints in their inventory that literally you’d have to give away to recoup. So you get 85% back if you cannot sell it but you have to ship it back to the company which isn’t cheap. Just to order more MYSTERY inventory which is a risk I would never take. I finally went to a party after buying some leggings and one shirt online (which I hadn’t recieved) and found a couple more pairs of leggings. Every single pair of OS (one size 0-12 leggings) fits extremely different. I have a post baby body, am a size 10 and I have a tummy and some of the leggings fit perfectly over it and smooth it and others they roll down and are annoying as heck. They are made in every different country that you can imagine and I am sure LLR is NOT paying top dollar for the manufacturing of these things. While I agree they are SOFT, again the fits and even the amount of softness are different with literally every single pair. If you buy online in a mega party or multiconsultant party beware, you don’t know whether they will honor their returns or even do them at all. I tried on a TON of stuff and overall I was NOT very impressed. As a SAHM I did go ahead and purchase some more leggings because they were fun but I do not see myself making this a regular habit and making my whole wardrobe consist of ONLY comfortable and slightly matronly clothing. Much to my friends dismay I won’t be personally sustaining their businesses with my friends and family either. This for me is a passing fad or trend that I do NOT see as being fully sustainable in any way shape or form because any consultant is at the mercy of the BIG BOYS at corporate. If you make some money for a couple years kudos to you and win a free (likely cheap cruise) good on you, but chances are here in the next year the market is going to be extremely oversaturated with this stuff and unless people stop selling the products and stop onboarding altogether, the company will keep chugging along taking millions from women across the country, smiling all the way to the bank. This was a huge eye opener for me and it will be hard for me to keep mum to my friends about to invest their husband and families money into this while assuming from lularoe’s very own website that you only spend 15 hours a week on this. I call BS on that!! I think its a full time job! My other fb friend who I went to see her LLR, said she only made het money back in April, purchased her lot in January and she said she JUST started turning a profit and its NOVEMBER. She said she has been working herself to the bone. I have seen her inventory as well and I was not impressed with about 95% of it. Le sigh. So women, friends and people seeking out easy cash, think of something else and buy those fun holiday leggings on ebay for 1/2 price.

Interestingly enough, I didn’t research much of anything. It’s all online for anyone to see, and it is quite simple to see how this MLM scheme benefits LLR corporate and how they’re laughing all the way to the bank. It really doesn’t take an MBA to see how this is a LOSING model for the “consultants” and a WINNING model for LLR corporate. All of this “unicorn” stuff, about limited numbers of certain prints and “one of a kind” items is malarkey. I would highly suspect that LLR purchases what in the fiber arts world is known as “mill ends”—-small pieces that are left after the major companies have taken the large pieces. That’s why there are “limited numbers” of certain prints. Whereas the clothing used to be made in the USA, LLR further maximized their profit by outsourcing production to overseas sweat shops—-that’s why there are so many complaints about holes in items, very different fits for same size items and items that don’t holdup to normal washing. Just out of curiosity, I was checking out some LLR Christmas/holiday print leggings on eBay as well as on some LLR consultant’s sites—I actually laughed out loud when I saw the outrageous prices being charged for these “unicorn” prints. Anywhere from $35 to $100+ for reindeer, Santa, bears wearing Santa hats, etc. I just bought a pair of Christmas leggings in Walmart last week for $9—-and they’re lined with fleece!! Anyone that would spend $35 to $100 or more on leggings they’ll wear a couple weeks out of the year needs their head examined. Someone I know recently “onboard” with LLR (my post is below), and I actually feel sorry for her after seeing the total garbage she received. Most of the prints are just plain awful and I can’t imagine anyone buying them or wearing them. I do understand the “different strokes for different folks” theory, but seriously—-much of what she got is downright offensive. If somebody REALLY wants to start a clothing business, knowing how to run a clothing business is necessary if you’re going to purchase your inventory directly from the manufacturers for wholesale prices (and not paying retail prices), knowing how & where to do effective marketing and operating your own business in which you process payments the way YOU want to is imperative. And that’s how people turn a profit.

Mrs. Bottlesoup, your Lularoe article was very interesting and an eye opener for someone like me who wants to start up a small business. I wanted to know, if in your research with small businesses, if there is one that stands out as being profitable for both the company and the investor? I know that plus sizes are becoming the new norm, and I am interested in the clothing line. I just don’t want to invest in a high risk company and lose all that I have put in. Any suggestions?

Yes: your own. I would draft up a business plan. It sounds like you know you want to do a clothing line and you’re interested in the plus size market. From there, you can find inventory sources, set up a website or a pop-up shop of your own, and be in charge of how you market and sell your curated inventory. The reason why doing it yourself is advantageous is that you have the control. You can build up your business slowly, and you are in charge of what you purchase, where and how you sell and market, and long-term, you have options. Starting a business is always a risk. I really admire Frogmama, who started her own online boutique when she was a stay at home mom. Her story is here: http://frogmama.com/blogs/frogblog/89439110-the-frogmama-story.

You’re math is all wrong. You can’t set a profit as a set number, but you have to have it as a set percentage. LuLaRoe products make at minimum 100% profit, therefore, you only need to sell half of your inventory to make back what you put in FOR THAT INVENTORY. Obviously other expenses are extra, but you can’t just say on average it’s $18 per item, because the cost of leggings vs the cost of one of the dresses is too drastic of a difference. You’re just hating on the brand and think it’s just another stupid thing, which you are entitled to your own opinion, but please don’t mislead people with your false information.

Good article. I am new to shopping LLR but I can already see how folks join all these groups and snatch up the good prints. Some even “flip” and re-sell high demand prints at a profit. I can see how as a consultant you can get stuck with a lot of less desirable inventory. While I like the clothes, many of the prints are just too bold and tacky.

Please tackle R+F next! I was recently invited to an “amazing event” here in town. At this “amazing event”, hosted at dinner time, over 100 women showed up to not be offered free drinks or snacks (cash bar only) and no products were out for testing. Everyone then gathered in the main hall, where you guessed it, we were subjected to a solid HOUR of blatant MLM plys for us to join as consultants. The mentioned ONE product. Otherwise, it was all talk about becoming consultants. And that was it. Here’s the best part, the $10 parking “voucher” was not really a voucher at all, so we all had to pay for parking. Talk about a lot of pissed off women. I spent $30 of my own money ($10 parking and $20 booze) for someone to try to talk me into selling product so THEY earn profits. I feel bad for my nice friend who invited me and hopes to make income from this. I will never buy a R+F products after that experience.

Though I am not a consultant, but for the sake of full disclosure, I have been looking into being one. At first I thought that your article was informative, until I saw that you stopped after just three progressions. I haven’t done the math by your standards any further, but I have done my own calculating with your structure and just wanted to stop by and offer another opinion. $15,000 is the standard that you left off with and I would like to start going backwards in time. along with the way that consultants would normally “restock”, it is a pretty good deal to invest $15,000 and get a return in only three iterations. Hear me out. If you go into clothing retail any other way (other than at home business) you have to factor in the cost of a building. Right off the bat, you are well over $15,000 in the whole. You are actually having to pay that for the life of your business, assuming you do not pass it on when you pass away. Then there are utilities, shelving/decor, dressing rooms (if not already built in), employees, and then your merchandise. So while you see it as a scam, I see it as a smart business decision. Let’s say that the consultant restocks their supply the three times you mentioned, a minimum of over a three month span. Then by month three they would start getting profit. Other businesses expect to be in the red for the first couple YEARS. This is all using your own math with different reasoning, so I don’t really have any “sources” other than you. I hope this helps those reading the comments in search of other perspectives.

I can see why you would think that, but the issue is you don’t actually own your LuLaRoe “business” – you are ruled and regulated by the parent company, you have no control over the inventory you receive, and you have little to no control over how your business is grown. You are subject to the parent company sending you a random selection of inventory. Even if you’re selling well, if the parent company doesn’t send you the inventory on time, then you’re out of luck. It’s not a true, traditional businesses model. It’s an MLM/direct sales platform. It’s not a good investment.

As a current consultant getting ready to jump ship, this is what I have to say to this: you pay for your initial inventory as said. You are then REQUIRED to place an additional order every month (starting at about $500ish) to remain an active consultant. If you are not making gobs of money from the get-go, you will be struggling just to replace the inventory you’ve sold with an order you may not be able to fully cover with your “profits”. This does not even count paying back the initial investment or paying yourself for the countless amount of hours you are spending to make this happen. Also, the company has so many consultants currently onboarding, many items are consistently out of stock, backorders are frequent, shipping times are sporadic at best, and special edition “capsules” are sprung without any more than a week’s notice to take part in. This plus them getting a second cut of your profits because you are required to use THEIR invoicing and payment system (frequently down), sales tax deductions if you live in a state where that matters, no control over what inventory you receive other than style and price (ever know why you see the same ugly print in everyone’s pop-up? Because everyone has it and it doesn’t sell) and you have a literal money pit. If you are not bringing in tons of money and placing orders weekly, this company does not care about you and you will be belittled for being “negative” and “not trying hard enough”. Ladies, please consider all of these things before signing on. They just want your money.

One critical piece of info that is left out: the consultants don’t get to choose their inventory!! They are sent patterns at random! So you can end up with a shipment of the ugliest prints and be SOL cause nobody wants to buy them.

My post is from a different perspective—the perspective of a “customer” of a new “consultant”, who happens to be my nephew’s wife. My nephew’s wife got sucked into it by a friend of hers & became a “consultant”. To begin, my nephew & his wife don’t have spot to piss in or a window to throw it out of. She has done many MLM things in the past—some kind of nutritional powder shake thing, Young Living oils, etc.—and it has never lasted more than a few months because she wasn’t making any money. But, for some reason, she has this harebrained idea that she is going to be making a 6-figure salary in a couple of months. I can see how the mentality of LLR is like a cult—-they all use the same verbiage, the same advertising photos, the same weak “promotions”. But, the thing that really drives me crazy is this—-I joined her Facebook group to be nice. I have no intention of buying any LLR items—I think they’re cheaply made, I do not like the styles (I am 5’6″, 115 lbs and do not need loose & baggy clothing [otherwise known as “comfortable” in LLR speak] with crazy prints all over them.), I absolutely HATE the prints and I think the items are grossly overpriced. I agree with the poster that said the real “customers” are the LLR consultants that buy the clothing from LLR—-all the consultants are doing is overpricing the clothing to make a profit. So, anyway—-after I joined her Facebook group, I come to find out that she is part of this “group” of many LLR consultants, and to enter into any of the giveaways or contests, I have to join every single one of the other consultants’ groups!!!! And there are about 18 of them!! I am NOT joining 18 LLR groups, only to have my FB flooded with LLR postings from upwards of 20 consultants. NFW. And I also noticed that she is “partnering” with even more consultants, so the number of groups that I am being asked to join goes up every day. And she was doing these “pop up parties” with other consultants on FB before she even got her own inventory. So, she received her first “inventory” (I am curious about which package she got, because as I said—they don’t have any money—and I know that it was put on a credit card), and I got a FB notification for every single blouse, skirt, kimono & dress she got & posted a photo of. I was stunned to see the absolute HIDEOUS prints on some of the stuff she received. Of course, those things have not sold. She sold a couple of skirts (the solid colors, of which there were few), and shirts. But, I noticed that is all she has sold. I mean, honestly—-some of the prints are God-awful. I’d actually have to say that the majority of the prints she got are hideous. And, when I asked if she had any leggings, she said that they are “on their way”, which I take to mean that they are backordered & she does not know when they will arrive. I think that is ridiculous, since LLR is all about those “butter soft leggings”, right? All I know is that I’d be rather pissed if I blew several thousand dollars on initial “inventory”, and the hallmark item is the only thing I didn’t receive because it is backordered. She got a couple of solid colors in the “classic tee”—-but they are $35!!! If I want a “classic” tee shirt, I’ll got to Target and buy one for $10 or less. She got NOTHING that I saw that made me feel like I had to have it. Pairing the cost of the items with the awful prints, as well as the poor construction (manufacturing has been outsourced overseas), equals poor sales in my opinion. If the clothing items were reasonably & competitively priced, she might have a chance to sell the stuff. I am curious to see how many of the items she sells in the next month, before she has to put in another order for $500. The funny thing is, I saw my her back in October when she signed up to be a consultant and I “tactfully” asked how she decided to do this, considering she already has a full time job (and so does my nephew) and that they live in a smallish apartment—-like where she was going to keep all the clothing, if it would be difficult to get the items shipped within a day, and what the initial outlay of money was. My nephew quickly chimed in “she will make up the initial investment within a month”. I don’t know if new consultants are being brainwashed by existing consultants or what, but there is NO WAY on God’s green earth that she is going to make up that initial investment in a month—not with the garbage that she received. I feel bad for my nephew—-he has $80K in student loans that he has to pay back (she has outstanding student loans too, but I don’t know how much), he couldn’t afford to buy a new car this fall (because his car had 200,000 miles on it) and so my sister-in-law gave him her 8 year old Hyundai Santa Fe & she bought a new car, and only this past summer my brother & SIL bought him a new set of tires because his were bald & he couldn’t afford to buy a set himself. However, having said that, my nephew & his wife frequently go to Starbucks (home of the $5 cup of coffee), go out often to eat and spend money frivolously. They pay $2000/month rent for the apartment they live in (rather than living with her parents in a HUGE house to save a down payment for a house). And now they are going to be stuck with a massive credit card balance because of this LLR thing. It boggles my mind how someone I thought was an intelligent person got sucked into the cult of LLR, thinking that she would actually make money. I guess when people want more money, and the sales pitch is so good with the promise of making $10,000 per month, gullible people fall for it. When the merchandise you’re selling cannot be chosen by you and you receive random prints in different sizes, you have to collect payments using someone else’s payment system, prices are pre-set and you can’t sell them for less than what you’re allowed, you cannot utilize different social media platforms and other alternative methods of selling, you do not have “your own business”—-you are re-selling items that you already purchased retail for much higher prices than what they’re worth. Perhaps LLR was somewhat of a novelty a couple of years ago, and the limited number of consultants made it highly desirable—-but now there are hundreds of thousands of consultants, and LLR can’t keep up with the number of people “onboarding”. That’s why there is several month waiting period to become a LLR consultant. No thanks. I’ll continue to buy the clothing I choose, where I choose, from places I choose. I will not wear these revolting prints to say they are LLR “unicorns” and “one of a kind” items. I’ll keep wearing my $10 tee shirts, my $20 leggings and other things that I paid far less for, that look far better. I feel bad for the consultants that get these awful prints that can’t sell them. I wonder what my nephew’s wife is going to do with all the stuff she doesn’t sell…………..and I suspect there’s going to be A LOT of things that don’t sell……….

It’s me again, with an update about this Lularoe nonsense. I only belong to ONE Lularoe consultant’s group on Facebook. Yet, she posts stuff CONSTANTLY about “multi-consultant sales”, “outfit of the day”, “if you want something you need to snatch it up right away so nobody else gets it”, etc. The latest, as of today, is a “cross country multi-consultant sale”, where people have to join 50—yes, that’s FIFTY—groups, one from every state, in order to enter a drawing for leggings. 10 women will win 5 pairs of leggings each. Then, undoubtedly, after joining all these groups, your Facebook will be non-stop with posts from every state. Why do I have a feeling that the consultants involved in this are going to be giving away the crappy, ugly prints that they can’t get rid of just to get people to join their groups? My consultant claims that entering this contest will give you access to all of the unicorns. Why do I doubt that? Unicorns apparently sell quickly—it’s the ugly prints that consultants get left with. Why save your unicorn prints to give away when you can sell them and make $$$? I smell a rat. There’s pork in the synagogue. It’s not kosher. To me, this Lularoe thing resembles a cult—-all of the consultants use the same phrases, all of their Facebook posts look the same, and now there are so many consultants that it has become quite competitive between them, because each consultant wants to get the “unicorn” leggings that will sell fast. That’s the part of this that I can’t quite figure out—-why ANYONE would want to dump $7,000 on a bunch of tops, dresses, skirts, kimonos & leggings that they were not able to choose themselves, and will receive a box of “mystery” items that could look like a disaster or be halfway decent. My nephew’s wife, who is the consultant I joined, did an “unboxing” sale last night. Out of about 20 pairs of leggings, she received 3 pairs that were acceptable—-all of the other prints were absolutely HIDEOUS—-mostly geometric prints in yellows, dark green, orange, red. So, the three pair sold right away, and now she’s stuck with 17 other pairs that probably won’t sell. As I have said in my prior posts—I am curious to see what happens with her in 3 months. I am curious about how much inventory she is going to be stuck with, how much money she makes (or doesn’t make), and how much money she actually put into this thing. I am seeing an awful lot of posts from very dissatisfied ex LLR consultants that are dumping their inventories, selling them for rock bottom prices to at least try to re-coup some of the money they wasted, and lots of complaints about how after LLR gets their initial $7,000, there is no follow up, there is no continuing training, waiting on hold for 2 hours when attempting to contact LLR to resolve billing issues or quality control issues, poor quality items with obvious defects, etc. I was interested in the posts on Glassdoor and other employment review sites—-LLR did not get very good reviews except from consultants who just jumped on the LLR train and are just babes in the LLR cult. As I said, lots of consultants dumping whatever they have left, very disillusioned with the whole thing. I continue to stand by my original theory—-that the real customers in the whole LLR cult are the consultants that “onboard” by paying $7,000+ for an initial inventory at retail prices, and who jack up the prices way above what they are worth to turn a profit. I feel bad for the women who are STILL chomping at the bit to become LLR consultants—-it seems that most of them are in love with the “butter soft” leggings, like to wear the tops & skirts & dresses, and have dropped several hundred—if not thousands—of dollars for a new LLR wardrobe. Apparently they think that because they emptied their checking accounts for all these new pieces of (poorly manufactured, defective & cheaply made) clothing, that the inventory they receive will fly out of their house & they’ll make a $10,000 profit in the first month. I wonder how all of the consultants would feel if they knew that LLR buys the leggings for about $2/pair and sells them to the consultants for nearly twice that much? Personally, I think someone would be more successful and more control of their own business if they shopped at discount stores, consignment shops & flea markets, picked up things that they liked & that would probably sell quickly, and ran an online clothing business that way. Shoot, I actually do know of someone that recently retired from a very good job, and instead of sitting around all day, she decided to do just that—–shop discount stores for pieces that she liked and sell them eBay, and guess what? She’s bringing in a tidy little 2nd income by just doing that. And she doesn’t have to do all these pop-up parties, “across the country” multi consultant sales, constant Facebook posts, use the “cult language”—-all she does is buy nice things, take a picture of it & post it on eBay.

Utah native popping in: Thanks for tackling this difficult subject! My family and friends have, for years, pushed every imaginable MLM on me: Amway, Quixtar, MonaVie, DoTerra, Younique, NuSkin, HerbaLife, LipSense, Jamberry, and now this Lularoe nonsense. (It goes without saying that all of them quietly swallowed their losses and walked away from the venture.) Utah’s MLM-friendly laws make it a spawning hotbed of these shiesty organizations:http://fox13now.com/2015/11/10/multi-level-mecca-utahs-mlms-are-big-business-but-few-make-money/

The outcome is always the same, and I have seen it over… and over… and over. People who become consultants will not ultimately make a profit, unless they were one of the fortunate few who got in early on the top. But once the hype fades away: those who are ultimately not going to profit (and that’s the vast majority of people involved in such schemes) are going to be left with less money, crap they can’t sell, and friends and family that don’t want to read their messages anymore and have probably removed them from their Facebook feeds. Also: these comments are going to age well, especially in several years when nobody cares about LuLaRoe anymore. But by then, the gullible will have thrown their money at the next fad!

I really can’t believe the loopholes that allow these companies to exist. It’s frustrating. And even more so, people blame themselves when it doesn’t work out. But really it’s designed to profit the parent company and “consultants” are just preferred shoppers.

The woman who started LuLaRoe is actually brilliant, her marketing plan is excellent and very organized, but butter leggings are available on Aibaba.com for $2.99 – $5.99 That is where all of the items seem to come from also. But there is nothing wrong with that, the creator of this business does offer the organization and motivation and targeted market. I would assume quite a few “consultants” actually give up and have a closet full of unsold product whether it is clothes or water purifiers. But think of the profit the creator of the any multi level business makes business makes. They buy a dress or other item for $3.00 wait till enough consultants pay thousand of dollars to join, uses that money to buy hundreds of items for $3.00 and then the business owner sells you 332 items for $15.00 each and the risk is left to you the consultant.

I love how the only thing you really did was bash this company. This is not true at all. Maybe for the liberal mindset where everything should be handed to you, your thinking will work, but it is not true. My wife started selling lularoe in August of 2016. The only time she has ever sold an item below retail is if it is to family or friends. LulaRoe will pull your ability to sell if you advertise lower prices. Do they catch them all, no. My wife was a stay at home mom, not a salesperson at all. She loves it, has never looked back. She does not make 10k a month. She makes about 1800 a month and your numbers are wrong. You guys are real good at bashing any company that is doing well. So you have to put in some work, what do you do for your income? Oh.. that’s right, you slander and bash other things!! How shady is that?? Then you can’t even get the facts right! That is the problem with bloggers and journalist alike, biased opinions. These are not facts, not one bit. The $18 profit to $2 profit model from selling leggins 2 for $40, how did you come up with that math? Leggins sell for $25, so that would still only be $5 off, not $16 dollars off. Your an idiot. I would tell you to do some research but obvisouly you won’t. Are there down sides, yes there are, are there struggles, yup, but the plus sides are amazing. What world is a 5k investment a high investment anyway?? I started a pizza restaurant in Lehigh acres fl, we (my partner and I) put up 30k of our own cash plus another 20k we borrowed! 10 times the amount and guess what, no catalog!! No custimers even knew what we had or if it was good! Wow, we had to do some work! Your an idiot and honestly, an embarrassment to journalism.

I fail to see how anything I said in the post could be warped into a “liberal mindset” and tangent on the state of American journalism. People who sell a product for a company deserve to be compensated – they should not have to pay to sell that product – because, in fact, LulaRoe consultants are NOT business owners. They have zero rights to the brand and strict restrictions on how they can and cannot represent the company. Have a good one, Jared.

Jared, first and foremost, calm down and learn to write properly — or read your posts prior to hitting send to check for grammatical errors. If you read reviews from other website, Forbes magazine included, you’ll see that they too make good observations about this company. They state the quality is poor, materials are shoddy at times, craftsmanship leaves a lot to be desired, and the “return” policy is difficult to maneuver. They’ve received poor ratings from various business groups as well.

I have attended many craft shows here in California, selling products that are not direct sales, and I can tell you, LuLaRoe reps sit there for hours on end selling $0! They have so much stock when they setup and usually leave with everything they came with. It’s a shame because the ones I have spoken to are very nice and hoping to have their own business.

My friends and I would never purchase their items, the designs are ugly and prices are too high. Mind you, we all make a very good living so it’s not that we cannot afford their products.

So, glad to hear your wife is making a decent turn on this line, I guess you must live in the right state for this market, however, don’t show your lack of education or business sense by calling people idiots or saying they’re an embarrassment to journalism. This blogger is providing a non-biased review since she is not or was not a LLR vendor — basically, it’s buyer beware.

Thank you, Gracie. Do you think the women who are enchanted by LuLaRoe would be interested in learning about becoming retailers/starting their own (true) business? Or do you think the allure of no-brainer setup is what gets most people through the door? (Would rather pay $5k because they think everything is “ready” for them, or would rather spend significantly less to build a company?)

The article is well written and just the facts – Bottlesoup makes very clear she does not have a horse in this race. Beyond all of the worthless bashing and thoughtful input about some flaws, albeit not dealbreakers, in the analysis there is no discussion of a critical factor: customer base. Where are these people coming from? How many times can you expect repeat purchases? How many items will each customer buy? What if you don’t have the proper assortment of sizes for buyers? What about those few remaining pieces that just won’t sell? This system appears fraught with nickel & dime expenses that chip away at any profit. There are 75k residents in my county and 18 LLR reps – start breaking down those numbers and nobody wins. Smart writing – thanks, Mrs. Bottlesoup.

Okay so I read about 3/4s of the comments on here until my eyes got tired of everyone telling about how the math was wrong….over and over again…sheesh okay she got the math a little funky but owns up to it…over and over again (Nelly and Tim McGraw song..cue). Shut up about it already, if you have the time to do the math on your own then why troll and comment where everyone else has? Or is it because it’s the only actual fact that initially was misspoken? I love your snarkiness, Bottlesoup. Reminds me, well, of me so I giggled every time I read them.

I was thinking of becoming a consultant and when I learned the invest cost, I was appalled. I do understand the whole thing with purchasing wholesale and such, I really do but maybe since I did Pure Romance which had a significantly less start up cost, I was just blown away. Let’s be honest, direct sales do suck, they really do. They’re not stable income, you never know which way sales are going to go and it can be hard to depend on. One week can be amazing the next you don’t get anything, you’re actually better off going to waitress however the upside of connecting with people, creating friendships and bonds are real. I can attest that when I did Pure Romance, I actually was able to become social again, hang out with my friends, had reasons to get out of my mom funk and not feel bad to have my kids being watched to be around a social environment because well I was actually working. And when the money is coming in, hell yeah it’s awesome but those are about the only upsides. You spend more time worrying that you are not investing enough time to get those sales. Overall the time you invest is time lost with family for the prospect of making a larger income.

Let’s just be honest, direct sales are a catch 22…damned if you do, damned if you don’t.

I’m still debating on whether or not to do Lula, unfortunately I don’t have 6k just sitting around to toss at them…or is that fortunately since it has caused me to really research and Bottlesoup, you’ve definitely given me a moment of pause. Honestly the only reason I’m looking into it is because my work at home job where I can sit on my flat booty and make money while chatting for a large company is pulling for internal starting March 31st.

In closing, you trollers, I do hope you find more material than what the last 250 people have said about the math as I have a headache from reading that over and over again. And if you are a Lula supporter and believe it in so much than why does this one blog bug the shit out of you all so bad you all have flocked here to give testaments? If it is really that great, then shouldn’t that show from the company itself and their actions? Food for thought, hope you all were hungry.

Thanks, BottleSoup. I’ll have to check out your stuff more often. Keep it up. (P.S. if you ever do one of these things about Pure Romance, let me know I’ll be happy to help ya out with any information on it. And I can actually give unbiased information since my brain hasn’t been upkept in the direct sales brain wash cycle)

Oh and if anyone tries to say anything about what I would know about this field, I actually do but thanks for the wonder. You just helped me fulfill a wish to be your very thought for a whole moment 😉

When I read your article I was totally feeling bad for my sis in law who just became a consultant about a month ago as she is trying to supplement income now that she and my bro who is in the military just bought a house. I was worried that she had just been duped so out of concern I talked to her about the $ she just blew but turns out she might be one of the lucky ones she said she invested a total of $6500 which includes additional merchandise all supplies needed & shipping and has already recouped 4300$ of her total investment, And still has plenty of inventory to sell. I don’t know if she is just a good sales rep or just lucky but so far it seems to work for her. I will say that she loves the product so that could be why it’s easier for her to sell. I’ve worked in retail sales over 15 years and I know it’s not for everyone maybe it’s the same with this sales model. In my retail sales experience there have been months where I have made 4300$ but my average was about 3k but other sales reps in my store only averaged 1k. I am curious to see how she does from here on out.

When you say recouping, you’re saying she’s made $4,300, but she hasn’t profited yet, correct? She still has $2,200 in sales to make before she earns a $1? Or no? And then she has to order more inventory?

The ratio of consultants is higher in my County and I managed to profit, yes profit, nearly 70k last year, and that was just from March-December. You get out what you put in. Anybody with a little bit of desire to succeed can “win” as you say.

I am a true small business owner. I created my own products, invested in my own product. I make my own candles…I don’t resell someone else’s work and call it a business. I am SHOCKED at how many women get fooled by this. The mark up on lularoe as a wholesale price is outrageous.The best investment model is buy low-sell high. 2nd – create a good product.I know too many women that are trying to get me to buy this mess. I can’t even bring myself to buy it because the products are so butt ugly. When you see people out in public, OMG, it looks like they’re walking around in over-sized pajamas. One lady was selling the stuff at $90 per outfit plus added shipping….not to mention they way they invoice is so sketchy. I’d rather buy brand named Ralph Lauren, Vera Wang at that price.

This article is pretty much nonsense guessing FAKE NEWS. This is coming from a husband of a consultant who hates LLR. It isn’t nearly as easy to make money as they would like you to think before you sign up but it isn’t exactly hard either. You have to spend a bit of time building your customer base but for the most part you can get away with working 6 hours a day doing something I guess is fun for woman…playing with clothes. As far as the profit margin…we sell just about EVERYTHING at the max price. We do some give aways and do some buy 3 get a fourth free but that is barely any of our sales. All in all you can earn your investment back in about three months and after that you make can make 4-5 thousand dollars proft per month. This is just being an average rep. There are a lot of reps who make twice of four times that much…and yes there are also other reps who can’t sell anything and they wash out but from what I have seen that is not the norm.

SOMEONE PLEASE – In figuring out the profit blah blah blah – take into consideration that your friends are mad at you bc there are holes in their leggings with the first wear. Friendships are priceless so don’t mess up the math! No thanks LuLaRoe. This single momma has better things to do with my money and would like to keep my friends around ????

All i can say to all of the things everyone here is saying is there is some people that made money and some that did not make money and that is the way retail works when your on your own doing it. some people think if they lower the price they can sale fast and others will not lower the price for anything and keep it on the high side and wait for that desperate soul that need the dress so badly there going to pay top dollar for it, ha ha. yes you need a lot of cash up front and if you do not do any giveaways and do not lower your sales and just wait for them to come to you, you will see profit. but not in a month. but in a 12 month period from what i did on a some paper and a calculator, after you pay off your “cost” for inventory and do the 382 ($6,6??.??) three times over you will roughly make around $22000 be for you count taxes and other internal cost like storage and time (because time is worth money, and don’t you forget that) its not by any means a full time paying income but its an income none the less. It would be great if your a mom(or just a wife) with a husband making around $35000 a year and you add that to the total of end of the year income. It’s not a guaranteed income though, just remember that clothing is a “fad” thing. Lularoe can fall behind in the “new” fad at anytime, and you could have a $10000 worth of inventory and no one to sell it too because its no longer popular. and that is the big risk i see in it for my wife because she wants to get into this but i always think about thing in a 5 year/ 10 year point of view. I think it would not last that long in my opinion. I could be wrong but it is a risk to put a lot of money into a retail business that can flop right from underneath of you. i look at this like buying stocks and let me tell you there is never a %100 for-sure that your going to make money in stocks. In-fact more people lose money than people that make money in the stock tread, and this really seems like that kind of deal to me. Lularoe is the one that is making the real profit! If we do this i told my wife she is going to have to be all the way in on it and be very aggressive on making the sales at the best price for us not the buyer, because were trying to make money not friends! i would also advise others to think that way too. Don’t work your self around the buyers make them pay for shipping and never do “giveaways”! Do you just give random people a few $20 bills for the hell of it? No, so look at your inventory as UN-liquidated cash. Don’t just give people stuff to be nice unless your already flowing with money and you don’t care, then by all means do so. So the last thing I would say is the money your going to start this with should be with money your okay with losing and not depending on for living cost. DO NOT TAKE A LOAN OUT! you will not make anything(or hardly anything) after you pay for all the interest that came with that loan. Don’t risk all of your savings on this its not worth the risk. i hope that people that are still thinking about this investment really think it through and look at every detail be for you put almost $7000 down on this. That’s money you already have that you could lose doing this just remember that.

I have to say, I’m a consultant and I didn’t read thru all the comments, but I did read your article. I onboarded 1/31/16. After initial inventory of approximately $5,000 PLUS all other expenses (hangers, racks, business cards, etc) we call our initial investment $8200. We paid that back in about 2 months. But we still weren’t making a profit. We did not finally make a profit until January of this year – ONE FULL YEAR LATER. This is because the premise of LuLa is to “buy more and have a bigger inventory. The more you have, the more you (supposedly) sell.” We continued to replenish and grow our inventory to the detriment of our friendship and relationships with our husbands. LuLa is VERY time consuming and you will see, the only people really making $ are those that make LuLa their life. They are available 24/7 and they have a large downline. Now, with so many people onboarding and going out of business, sales are lower and there are less people willing to onboard. Don’t forget all the bad press. While I truly love the clothing, I’m not sure this business is what I want to be doing forever. You are also you’re own business, but you really aren’t. I have a love hate relationship with LuLa. If anyone is interested in hearing actual facts about being a consultant – NO KOOL AID – I’d be happy to answer questions. 🙂

It appears that I have arrived late to this hotly contested battlefront (not even mentioning the business math).

While I don’t have all the answers about LLR, I can tell you what I have seen. I say this as someone who’s studying to take the Bar Exam shortly and has some experience in the legal world.

Sometime ago, my irresponsible friend and law school peer let his wife invest in a LuLuRoe start-up package. She is a stay-at-home Mom who believed that the void in her life had opened up; marrying young (23 yrs), having a small child (2 yrs), and a husband struggling mightily in law school paying $43,000/year in tuition alone because he couldn’t get a merit scholarship.

So, she decided to fill the aforementioned void in her life by “starting her own business.” (Quoted for a reason). She purchased roughly $8,000 in inventory to get started (a terrible decision made only worse by the fact that she funded this inventory on her family credit card). She followed her purchase with the infamous “launch party” events. At the events, she hosted the wives of other poor, struggling law students, and tried to guilt them into purchasing. Some purchased from her, including my wife who did so from the goodness of her heart–a goodness I don’t share . . .

After that, she sold some things, but ultimately was stuck with a huge swath of inventory that people don’t want. Why did she buy items that don’t sell, you ask? Well, it just so happens that the LLR higher-ups don’t give them a choice. Yup, that’s correct, the company forces the sales consultants to take on inventory they know will no sell.

In order to compensate for the undesired items, she’s had to purchase another huge batch of clothing at another $5,000. This batch will also have undesireable items in it that cannot sell as well, and the cycle will repeat until I can get enough people together that will help me to hold an intervention for her.

She’s now $13,000 dollars in needless CC debt, and is contemplating whether or not she should open up a LLR “mens” inventory line. Because, you know, what guy wouldn’t feel lame telling his friends he’s wearing a LuLuRoe shirt (sarcasm added)!

Thanks for sharing! Is LuLaRoe really coming out with a men’s line? I find that interesting, considering most MLMs and Direct Sales companies target stay at home moms and housewives. I need to learn more about this.

As someone who has practical and educational experience in business, I have a different opinion on LuLaRoe. If you get into any business that is or looks like a MLM and want it to pay your investment back within a month without hustle, then you’ll always be broke. If you approach LLR as a long term solution growing it organically instead of buying at wholesale and selling barely above wholesale then you’ll do just fine. Have I seen people not be successful in LLR, yes. Was it because of the company? No. Have I seen women make an incredible amount of money in a relatively small time while growing a business? Yes. And it wasn’t because of the company it was because of them. I’ve watched the ones that tried to be competitive with prices fall out of the mix and the ones that study how to grow a business become successful. You could pay your initial investment off when you sell your inventory, but you won’t have money to restock. You have to develop a payment plan to your initial, payment to growth and the postage and other charges are usually paid by the customer so that’s null. I think if you work the numbers and show an organic growth and not expecting a “get rich quick” math to work you’ll see success more than you’ll see failure, but to each their own.

She started last August or so with a partner, they put it all on a credit card.

The best part about watching her run the business is her desire to make it work & that she enjoys the journey of running the business with her partner.

Does she make money? Yes. Is it worth the time commitment? No, financially speaking. And, Big no from Family and Marriage standpoint (my view) Do they manage or recruit? No, no interest but really that is the way you will make real margin or money for the time being spent.

She makes less than min wage doing this work. Think of it as a hobby you would enjoy but unless you build a team the time v profit is not there IMO.

Her trends are 7000 in sales with some early months of 12000 but the inventory replacement reinvestment scales with it. I showed this to her prior to doing it but she is a CPA and said I was wrong.

I wish I had my original spreadsheet as it showed expected activities per sale, estimated time, and per sale profit when considering inventory replacement – it is pretty close to her experience and comes to 2 dollars an hour.

Fast forward to today and she said she would probably quit if her partner wanted too. As a stay at home mom this is taking way more time than it’s worth for an extra $700 to $1500 dollars a month. Yes we could sell all inventory and make 5k at most split between us (that is at most). Credit card was paid off in 5 months taking no money from the business (work for free). Now the reorder v sales the net is 1500 per month split to 750. Now figure taxes and.. well it’s less than peanuts from my perspective(until inventory is sold off at exit) even still 5 K is not much money to me at all for 8 months.

The company is bringing on more and more reps with more inventory so if you talk to folks that do online sales mostly thru Facebook- most would tell you sales volume is not as good as last year at this time. Expect to spend all weekend doing pop ups. Goodbye family time.

This is not a bad opportunity like a Rodan and Fields but I still think it’s not a good use of an educated persons time unless they want to build a team and set that expectation right with who they bring on.

[…] that your success is heavily (not solely however) based on who you know and your networking skills. This article estimates that if you want to make a return on your investment within two months, you’d need […]

[…] received thousands of comments from many, many readers about my original piece: LuLaRoe or LuLaNo: Will Your Investment Pay Off? Quite a few commenters pointed out that the math I used in my article was not accurate. I read […]

[…] Mommy blogger, “Mrs. Bottlesoup,” warns that, after the numbers up herself, you MIGHT be lucky just to earn back your initial investment (depending on how much you put in) if you sell every item in your inventory. She uses the following example based on another LLR blog: […]

[…] requires an initial investment of $5,500 in inventory to become a consultant, but according to one estimate, based on figures from a LuLaRoe seller, representatives must invest at least $15,000 in inventory and sell it at a markup of more than 40% […]

[…] requires an initial investment of $5,500 in inventory to become a consultant, but according to one estimate, based on figures from a LuLaRoe seller, representatives must invest at least $15,000 in inventory and sell it at a markup of more than 40% […]